Innovation is vitally important to the local and national UK economy. It brings long-term growth, prosperity, high value jobs and productivity gains. Engineering and technology developments play a key role in this field – and with Industry 4.0, disruptive and converging technologies, as well as the growth of the knowledge economy, this role will undoubtedly increase.
There are many public and private initiatives available for start-ups. However, the IET’s report highlights that robust ecosystems for late stage R&D and scale-up companies are often limited. Funding and support does not always reach those SMEs with the best prospects for growth. In fact, SMEs often don’t know that such support is available.
The report features findings from some of the IET’s main innovation activities in 2018. These include a survey of SMEs, and roundtables with financial investors, academics and SME managers. The report also draws on recent research and data from other leading organisations and government departments. It raises the key questions:
- What will drive up the number and range of successful SMEs?
- What are the barriers to SME growth?
It also identified key issues around:
- Finance – access to resources;
- Skills – development within organisations;
- Investment justification – risk / return challenges;
- External recruitment – finding candidates with the right hard / soft skills;
- Accessing external expertise – especially from industry peers;
- Accessing relevant data – to inform strategic developments / effective market penetration.
In addition, the report highlights three common problems which are creating barriers to SME growth:
- Inventor’s Syndrome: engineering prowess is not sufficient. Business and marketing acumen are essential for commercial success.
- The scale-up gap: There are clusters of public / private operational excellence. However, the lack of comprehensive, joined-up support reduces opportunities. It may lead to company relocation or takeover at a discount to their potential.
- The financial disconnect: a shortage of patient capital and of investment-ready opportunities is reducing the ability of companies to invest for growth.
The report calls for a holistic, aligned innovation ecosystem that links R&D, start-up and scale-up developments for sustainable corporate success. This ecosystem requires a focus on recruitment, training, mentoring, networking and best practice, supported by awareness-raising and the availability of key data sets.
Government plays a key role here – it can drive the development of local and national strategic action plans; it can co-ordinate cross-departmental pipelines and convene access to markets and smart finance. Building on successful, agile initiatives at a local level, a virtuous circle of innovation support can help transform economies and society in general.