Employing and nurturing creative people is more important for Scottish business innovation than striving to come up with a bright idea, according to new research by Clydesdale Bank. The new survey suggests small businesses in Scotland are investing in creative skills in a bid to create growth.
In a survey of business leaders at more than 750 UK-based small and medium-sized enterprises (SMEs), half of Scottish respondents (50%), said having the right people and skills is the single most important factor for a business to be innovative. This is compared to just under a quarter (24%) who believe that having the right idea is most important.
As a result, the research suggests Scottish SMEs have prioritised staff training and development over other investment opportunities in the past year, and intend to do so again in the next 12 months. New equipment, technology and investment in premises, are also key, according to the survey.
The belief that people come first is underlined when asked whether the UK economy has the right skills, or the right environment, to foster creativity and innovation. Just over half (52%) of Scottish respondents feel the UK economy fosters innovation but this increases to two thirds (66%) who believe the economy has the right creative skills for growth.
However, it appears businesses could be selling themselves short when it comes to accessing the support available for innovation or research and development (R&D) activities. According to the survey, only 22% of Scottish businesses has ever accessed incentives such as Scottish Enterprise R&D grants or the UK Government’s Patent Box, and less than a third (30%) plans to do so in the future.
When it comes to financing innovation and creativity the research found that just under a third (32%) of Scottish respondents have a dedicated budget for research and development, while 54% do not set aside any budget for R&D. When looking at different industries, two thirds of manufacturing businesses, and 58% of IT businesses, put money aside specifically for research and development.
Small and medium-sized business experts at Clydesdale Bank believe the ability and opportunity to develop skills and access support for innovation is critical as the economy experiences a shift in industry.
In the last 50 years, the makeup of the UK economy has pivoted from being dominated by manufacturing to being service-led. As a result, many businesses have had to invest to give them a competitive edge. Since 1997, the share of the service sectors’ contribution to the UK economy has increased by 54% to 80%.
Encouragingly, according to the survey, almost half (46%) of Scottish respondents have an accurate understanding of the value of their intangible assets – assets such as a company’s brand or intellectual property.
Alastair Christmas, Regional Director of Business and Private Banking at Clydesdale Bank in Scotland, said that businesses need to consider creativity, in whatever form that takes, when planning for growth.
He said: “Innovation comes in many forms, not just cutting-edge technology or design. For many service-led industries this could mean being innovative and creative to meet customer demands, or approaching the market in a different way to competitors. What is important is that businesses continually review their performance and how they serve customers to ensure they are on top of their game.
“In today’s increasingly digital economy, where customer demands are higher than ever before, innovation is even more crucial. We’ve seen the make-up of our economy move from one of heavy industry to one of knowledge. This means growing businesses are often rich with intellectual property and intangible assets, rather than premises, plant or machinery.”
This research is published as Clydesdale Bank launches its fifth Business Week - its celebration of British business.
The theme for Clydesdale and Yorkshire Banks’ Business Week is ‘Growth through innovation’, a positive and forward thinking approach to inspire businesses across the UK. Over 200 events will take place across the country, from breakfast meetings to flagship events, with an impressive line-up of innovative speakers including Jo Fairley, co-founder of Green & Blacks, and Will Whitehorn, former president of Virgin Galactic.
In the north east, the innovative work carried out by Aberdeen Football Club via Aberdeen FC Community Trust will be under the spotlight. Also in Aberdeen, Clydesdale Bank and the Oil and Gas Innovation Centre will be joining forces to discuss facilitating innovation in the sector.
For further details or to register please visit www.cbonline.co.uk/business/business-week.