If you wonder why there has been a lack of brilliant ideas coming out of Britain lately it might be because the nation's businesses are cutting back on research.
A third of British companies spend nothing on searching for new ideas, services and products according to a new survey conducted by IT consultancy Portal. The survey of 500 companies up and down the country found that only a fifth of companies spend more than five per cent of their revenues on research and development (R&D), despite the fact that nearly 52 percent recognise that innovation is critical.
In a whitepaper entitled “Innovation: the first casualty of a downturn”, the companies said that the economic downturn is the main reason for failing to invest in R&D. Less than seven per cent of respondents have increased their investment since the start of the recession in 2008 while nearly 14 per cent have “cut their investment in R&D enormously.” More than 48 per cent said they would invest more if the government was able to offer tax breaks on R&D expenditure.
Lack of available funds is not the only reason for companies failing to invest sufficiently. Perceived difficulty of the process is deterring some from applying sufficient resource too.