Research from accountancy firm KPMG claims to have highlighted a disconnect between the value that businesses place on innovation and the amount that they are investing in it threatening to inhibit the growth of the UK’s middle market sector.
A survey of 215 medium sized businesses found that 90% of companies agree that being better at innovation than competitors is fundamental to their long time survival.
KPMG claims that companies’ confidence that they are excelling at innovation is low, with only a quarter (26%) believing they are superior to their competitors on the innovation front.
According to the study, only 6.7 % of the average company’s turnover is in innovation. The lack of confidence in the effectiveness of this spend also suggests that many business owners don’t really know what ‘good’ looks like.
Ben McDonald, enterprise partner at KPMG, said: “In this world of extraordinary technological advancement and digital disruption, the old adage ‘innovate or die’ has never rang more true.
“Yet while many business leaders understand the importance of innovation, too many companies across the UK simply haven’t grasped the nettle.
“Whether this is due to a fear of failure, a reluctance to monetise ideas or a lack of skills and resource, the uncomfortable truth is that many privately-owned businesses are not ‘walking the talk’ and in doing so, are limiting their growth potential in a significant way.”