23 August 2016 | By Ruth McKernan Community

Innovation needs an international perspective

Success in British cycling has shown the the value of innovation - and how international competition spurs it on. Now Innovate UK wants to help the country's small businesses think more globally

If you want to see how the UK can rise to a challenge – look no further than our Olympic cycling team. Behind their talent and ambition sits the strength of a nation of multidisciplinary researchers and technologists.

Every aspect of innovation has contributed, from inventing new materials for lighter bikes, breathable suits and streamlined helmets, to developing a better understanding of nutrition and both physical and mental strength; from smarter velodromes to the incremental gains that come from applying digital monitoring and machine learning to improve technique.

The CBI itself has recognised that “business innovation is fundamental to economic prosperity”. Innovation requires concerted effort, and sustained commitment from research, business and government. And this is just as true for delivering business productivity and economic growth as it is for Olympic gold.

Take the automotive sector; from a nadir in the late seventies, the industry is now delivering record growth, exporting 80 per cent of cars built in the UK to over 100 countries and it has the best productivity statistics in Europe. The network of researchers, SMEs and global players that form the Automotive Council understand how to work together, the new technologies they need to remain competitive and the gaps that still exist.

The future for international engagement

Programmes such as Horizon 2020 in Europe play a vital role in supporting innovation in the UK and, thanks to the government’s recent commitment, they will continue to do so – at least for the next few years.

About a third of Horizon 2020 funding goes to businesses. Thus far, UK SMEs and Innovation Centres have won 680 million euros from Horizon 2020. Last year our SMEs secured more (318 million euros) than any other country; that’s about the same as their funding from Innovate UK.

The government’s reassurance of funding continuity to existing Horizon 2020 awardees and to applicants securing their awards before the UK leaves the EU should prevent a lack of confidence developing and help keep businesses focused upwards. Brexit can only encourage UK firms to look outward too.

When I was reviewing scientific grant proposals a few years ago, the panel discussed three tiers of quality: was this a good proposal, at the top for the UK or one that was truly globally competitive? In science as in business, analysis of what others can achieve encourages success.

European research has shown that internationally active companies (47%) introduce innovations to market more often than companies focusing on their domestic market (20%). And there is a strong positive correlation between companies that develop their global interactions and their subsequent growth; both in staff employed and in financial turnover. The UK market is small. For many companies, scaling and growth has to be through global expansion.

A boost for small businesses

At Innovate UK we are encouraging UK businesses to look outwards by launching a £1.2m fund targeting small and innovative firms looking for international partnerships or seeking new markets. We are trying to help UK firms build relationships with the most relevant overseas companies, wherever in the world they are located. A competitive application process is open for registration until noon on 21 September.

Our funding will support companies in pushing out the horizon of UK business – especially those that haven’t had the means, or inclination, to think globally in the past. In today’s economic climate, we simply can’t afford to look in.

There is much more to do, of course. We have high hopes for the government’s commitment to a renewed industrial strategy and will work with them to deliver it. And we have high hopes for the SMEs and innovative programmes we have already supported.

Like our athletes, not all firms will ultimately succeed. All we ask is that they do their best with the funds they have won: grow their businesses, work to create high-value sustainable employment and prosperity across the whole of the UK. Then, maybe, the pride of success in UK business growth will match that seen in the velodrome.