Lack of innovation strategy could be harming UK businesses

Business executives in the UK admit to not understanding the digital economy, despite believing that a lack of innovation is harming their organisation, a new study has revealed.

The research, conducted by Ness Software Engineering Services with OnePoll, reveals that 57 per cent of the 1,000 business leaders surveyed do not understand the digital economy, with 63 per cent of respondents from London's Tech City admitting the same.

In contrast to this, 42 per cent of companies point to a lack of innovation as something that could potentially hurt their business. Interestingly 42 per cent of respondents said they expect to increase R&D spending, while 32 per cent said it might be cut altogether.

Pete Rogers, senior vice president of European operations at Ness SES, said: "UK business leaders recognise that lack of innovation in digital products and services could be holding back their organisations, and the risks of not preparing for the digital economy far outweigh internal organisational challenges of determining the best way to approach it.

Of things the government could do to aid innovation, 44 per cent of respondents pointed to the availability of tax breaks and subsidies, 42 per cent to support for foreign investment and 34 per cent to investment in universities.

One oft-cited barrier to innovation in the UK is the growing skills gap, with fewer skilled employees for IT companies to choose from. Risk aversion could also be blamed, however, with 40 per cent of respondents agreeing that they would be frightened of how the failure of an innovative project they were assigned to would negatively impact their career.