Turning Innovation into Reality As UK businesses face rising costs and fewer resources, there's a pressing need for the government to turn pro-growth rhetoric into real action.

As UK businesses face rising costs and fewer resources, there's a pressing need for the government to turn pro-growth rhetoric into real action.

In a landscape where businesses are grappling with rising costs and shrinking resources, Njy Rios, partner at Ayming UK, a specialist innovation consultancy that helps companies access funding and grants to innovate, underscores the pressing need for the government to turn pro-growth rhetoric into meaningful action. "It's one thing to say you're pro-growth; it's another to turn rhetoric into reality," Rios points out, highlighting the strain that rising employer national insurance rates are putting on businesses. The growing pressure on firms means that many are trying to scale and grow with fewer resources and manpower. Rios warns that without a clear plan for innovation, businesses will focus on "short term survival over long term innovation," which could worsen the UK's productivity problem.

Against this backdrop, the importance of accessing R&D tax relief has never been greater. However, many businesses face a barrier: "While many businesses are aware of the relief, there is confusion about whether they're eligible." Rios explains that HMRC's efforts to curb fraudulent claims have unintentionally created an environment where "many legitimate claims are being rejected," discouraging businesses from even attempting to make claims. He urges the government to simplify the process: "If the Government wants to kickstart economic growth, it needs to start with removing the complexity from the R&D tax relief process so that innovation is rightly rewarded."

Benjamin Craig, Associate Director of R&D Tax Incentives at Ayming UK, elaborates on the broader need for a supportive environment for innovation. "Investment alone isn't enough to kickstart growth; it's about creating an environment conducive to innovation that targets the right areas of our economy." According to Craig, a crucial aspect of the UK government's success lies in its ability to channel funds into areas that enhance productivity. "The problem that many businesses face, however, is the difficulty of finding workers with the necessary technical expertise to drive innovation and operational efficiency." He stresses that investing in STEM education and vocational training will be essential to ensure a steady pipeline of talent: "Investing in STEM education and vocational training now will ensure a steady pipeline of talent in the coming years, equipping businesses with the skills needed to continually thrive in a rapidly evolving economic landscape."

Craig also highlights the importance of targeted investment in high-growth industries: "Beyond skills development, we must strategically invest in high-growth industries where the UK has a strong competitive advantage. The country cannot lead in every sector, nor should it waste resources trying. Instead, the Government must focus on industries where our universities, research institutions, and businesses already excel, such as high-value manufacturing, green technology, and health and wellbeing." He concludes that investing in these areas will boost job creation, enhance global competitiveness, and help drive the Chancellor's "much-desired economic growth."

For Rios and Craig, the message is clear: simplifying R&D tax relief, fostering a culture of innovation, and strategically investing in key sectors and skills will be essential for unlocking the UK's economic potential and ensuring long-term growth.