FSB is calling on the Government to introduce a new tax credit to address a worrying innovation gap that’s holding back the UK’s productivity.
A new report released by FSB reveals that almost a quarter (24%) of small firms have not made any significant changes to products or ways of working in the last three years – with many held back by pressures on time and finances.
You can read the full report here
Innovation for small firms is not confined to a workshop or lab. The report shows small businesses that do innovate are far more likely to introduce a change within their business (95%) like a new software or change to organisational structure or marketing process, rather than invent a new, market-changing product (25%). This has implications for the current innovation debate, which focuses mainly on creating new products rather than ways of working.
As well as improving support for those creating ‘new to market’ innovations, including reducing the complexity of the R&D tax credit and Patent Box Tax relief systems, Government must put more emphasis on supporting businesses to make improvements within their firm. Larger firms should help promote innovation throughout their supply chain and, where appropriate, encourage them to make claims for tax credits.