The main barriers to innovation

Innovation is fundamental for businesses as we adapt and change the way we work. Now more than ever due to the pandemic, businesses in every sector are having to do things differently.

30 September 2020

Innovation is fundamental for businesses as we adapt and change the way we work. Now more than ever due to the pandemic, businesses in every sector are having to do things differently in order to stay operational and competitive.

Not only is it key to addressing some of the biggest challenges facing the UK and Yorkshire economies, it is also crucial to productivity and building resilient businesses.

Innovation can come from formal investment in research and development (R&D), yet we’re seeing more than ever how businesses can innovate through diversifying products or adapting existing services. This innovative activity improves efficiencies and offers resilience for businesses to survive and grow through the economic recovery.

What types of innovation are businesses engaged in?

Earlier this year we carried out the Leeds City Region Business Survey, providing insight into innovation activity across our region. Of the 2,000 businesses from the private, public and community/voluntary sector surveyed, 69% of businesses have engaged in innovation, defined here as introducing new or significantly improved goods, services, processes or technologies. It also found that 47% of businesses participated in knowledge transfer and 24% have invested in research and development.

Although the responses may have changed since March, there are many positives to take from the data around how businesses innovate and in what way they are doing so.

Collaboration drives innovation

The survey also identified how collaboration drives innovation, with 40% of businesses partnering with other companies, 34% with business networks, 19% collaborating with universities and 9% working with innovation or research associations. Collaboration is how innovation happens; the coming together of new ideas, new minds and knowledge to bring a concept to a reality, which is very much what our innovation support aims to do.

Innovation blockers

Despite an increase in innovation activity from 2019, there are significant reasons why a lot of businesses don’t innovate. Whether it’s a lack of understanding of what innovation is or can do, or a lack of awareness of where to go for support, there are practical barriers that prevent innovation from taking place in SMEs:

  • Time and headspace – to be able to dedicate time and space to developing ideas, creating concepts and seeing the day to day operations differently
  • Finance – having the funds or investment to pursue innovation projects
  • Risk – with many ideas, the outcome is uncertain and unknown which often poses too much of a risk for a small business to pursue

It’s a topical conversation too. A recent article published by our partners, Innovate UK, outlined the top 5 blockers which continue to limit businesses from innovating. Much of this insight identifies challenges that can crop up at any stage and in any business:

  1. Fear of failure
  2. Conflicting goals in the organisation
  3. Lack of innovation skills
  4. No clear definition of innovation
  5. Disagreement of who owns innovation

All the findings highlight there is still a way to go to drive innovation, but we’ve got some strong foundations on which to build success. Speaking with the Leeds City Region Enterprise Partnership’s (LEP) chair, Roger Marsh OBE DL, he shares his views on how these barriers are impacting innovation in our region.

“We have many businesses who currently innovate or who have the potential to be leaders in our region. We want to encourage and drive a proactive approach to innovation and be at the forefront in leading those sectors where we have significant strengths, such as health, textiles and food & drink which the Leeds City Region is recognised for.

“There is considerable opportunity for businesses in innovation, and we want to help them seek the right help to achieve this. With a variety of support available, navigating the innovation landscape is difficult. That’s why we work closely with all providers across West Yorkshire to join up the offer to better support SMEs and connect them with the right research organisations, investors, universities, and help break down some of the barriers that SMEs face.”

What can businesses do?

We know innovation is key to building resilient businesses. However, there is still a huge amount of work to do with businesses to understand how barriers can be overcome and at the LEP we offer the support network to help.

The LEP’s Business Support Service helps businesses to navigate what innovation support is available. Acting as the vehicle and independent broker service, our team of Innovation Growth Managers can connect and partner businesses with the right support for your project. Whether it’s research, advisory support or funding, you can learn more about our innovation support here.

Sources: Innovate UK; Leeds City Region Business Survey 2020