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Fri December 13 2019

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Report finds mismatch in R&D ambitions

21 Nov A international report by business performance consultancy Ayming has found that most businesses are happy with their current level of research & development while most governments want to see it boosted.

Ayming UK’s International Innovation Barometer 2020 report, which covers all business sectors, found that 83% of respondents are satisfied with their current levels of R&D. However, in part as a result of the pressure being applied by global governments, they still expect activity to increase over the next three years. Three-quarters of firms are anticipating a rise in R&D budgets – a third of whom expect this rise to be “significant”.

The report points out that incentive schemes are plentiful though the most common source of funding was from a company’s own resources at 49%. With tax credits and grants at 43% and 42% respectively, governments should encourage uptake by streamlining application processes, the report advises.

One of the categories of businesses in the report covered chemical and civil engineering. Here, 35% of R&D was found to be self-funded, with 53% coming from R&D tax credt, 35% from national grants, 28% from international/EU grants, 20% from equity/debt fundign and 5% from crowdfunding.

The impact of Brexit on levels of R&D investment was also examined. In the UK, only 48% of those surveyed are expecting budget increases in the next three years, compared to 92% for the likes of Spain.

Other findings included that 83% of innovation teams have a majority of men. “It's been proven that diversity helps businesses to innovate yet, 46% of respondents believe diversity to be unimportant,” says the report. “Encouraging more women into R&D would widen the talent pool.”

Currently, 63% of firms rely on internal resources for their innovation. “R&D is traditionally very secretive but collaborating can reduce costs and be useful for sharing insights and best practices,” advises the report.

Almost half of businesses – 45% - innovate only locally, but the report says that undertaking R&D abroad can provide advantages. The most popular location for a business to undertake activity abroad was Germany, which will be launching its first R&D tax credit scheme next year.

Access to talent will prove crucial, it says. In total, 73% of the companies expect talent to impact an organisation’s ability to invest in R&D, with two-thirds of all respondents expecting this impact to be positive, indicating that they expect new talent to help them manage new activity. However, this may reflect complacency around the availability of quality R&D talent in the pipeline.

Ayming UK and Ireland partner innovation incentives Mark Smith said: “R&D success depends on talent. It’s a highly-skilled field, which is driven by people’s ideas. With competition over talent set to hot up over the coming years, businesses should take steps to prevent the pool drying up.

“One thing that would help is a greater focus on gender diversity. Yet at the moment, 46 per cent of business leaders believe diversity to be unimportant, with 23 per cent saying it is ‘not important at all’. We think this is a mistake. 83 per cent of innovation teams are majority male, with a quarter of firms reporting that fewer than one-in-ten of their R&D employees are women. It’s clear there is an untapped pool of women that businesses should be looking at to succeed in new R&D projects.”

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