HM Government

A strategic approach to encourage innovation and enterprise

With the emergence of new industries and the continuing evolution of existing sectors, ensuring a climate of innovation and a culture of entrepreneurialism is critical to achieving our goal - enabling UK businesses to seize the opportunities of the future in the global economy today.

The innovation and entrepreneurialism of our economy will drive the wealth and high-value employment of future economic growth. Government’s role is to encourage innovation and to support enterprise which is needed to enable businesses to develop across the whole of our economy. Individuals and businesses must continue to benefit from the structures and framework being put in place to ensure we grasp the opportunities of the future.

Enabling innovation

The Innovation Nation White Paper¹² sets out the Government’s ambition of making the UK the best place in the world to be an innovative business, public sector or third sector organisation.

The Government is committed to supporting innovation in existing companies and sectors as well as investing in knowledge transfer and R&D. Investment in science has doubled, further improving the attractiveness of the UK for research and innovation, and we have introduced the R&D Tax Credit, through which more than £2.3 billion of support has been given to businesses since they were launched in 2000.¹³

The Innovation Nation White Paper sets out how government can send signals or set policy in a way that encourages innovation. For example, the Government spends billions of pounds every year procuring public services and building vital infrastructure. It is important that we harness this to support innovation.

The UK has a strong tradition of scientific entrepreneurship, and we will continue to invest to support this. We have provided dedicated support for knowledge transfer activities between universities and firms, including the Higher Education Innovation Fund, the Knowledge Transfer Partnerships programme and the University Challenge Funds.

Building on the Innovation Nation White Paper, the Government has recently set out further actions to maintain our progress on innovation to cope with the economic downturn and to emerge stronger from it, including:

• a commitment from every government department to produce an Innovation Procurement Plan, setting out how they will procure innovative products and services, providing new opportunities for innovation by businesses and the third sector;
• the rolling out of Innovation Vouchers by the Regional Development Agencies (RDAs) to help business access the expertise of the UK’s knowledge base, building to a level of 1,000 vouchers per year by 2011; and
• a new pilot programme to ensure UK businesses benefit from the specialist expertise of further education colleges to make businesses more innovative and enable them to move into new markets.¹⁴

Stimulating enterprise

Encouraging enterprise and unleashing entrepreneurship will be vital to ensuring a dynamic economy and seizing new opportunities. The Government is committed to developing everyone’s entrepreneurial skills in order to position the UK economy and its workforce to respond rapidly to new opportunities in the global economy.

The Government’s vision, as set out in the Enterprise Strategy,15 is to make the UK the most enterprising economy in the world and the best place to start and grow a business. We must unlock the nation’s entrepreneurial talents; boost enterprise skills and knowledge; help new and existing business get funding to start up and grow; and ease the burden of regulation - particularly on small enterprises that feel its impact most.

We are encouraging a culture in which talent can be unlocked and flourish, recognising differences in enterprise culture across different social groups, reducing the fear of failure that holds enterprise back, and giving everyone the opportunity to be entrepreneurial. As a measure of success, the Government will look to see an increase over time in the proportion of people with the ambition to start and grow their own business.

We are ensuring that individuals and businesses have access to and are able to develop the best possible knowledge and skills to support the growth of their business. Building on announcements in 2008, we will augment the portfolio of publicly funded business support products with products to support collaborative or single company R&D and knowledge transfer and exchange, under the Solutions for Business brand.

In the PBR the Government committed to implementing further measures to ensure small firms have access to finance in the current economic climate and we will very shortly be launching a range of measures to facilitate this. In addition, £10 million of risk capital has been earmarked for social enterprise.

Recognising that unnecessary or overly complex regulation can stifle enterprise and has a disproportionate impact on small firms, the Government will build on its targeted net reduction in the administrative burden of regulation of 25% by 2010.

Furthering the Government’s Enterprise Strategy to enhance the UK’s enterprise culture, we will now facilitate ensuring entrepreneurial skills for all by:

• working with leading organisations such as the Prince’s Trust to actively encourage under-represented groups to consider entrepreneurship and self-employment as a route to realising their potential in the economy;
• examining new mentoring approaches to further support business start-up, including through online social networking, to ensure that aspiring entrepreneurs have the best support available to grasp new opportunities; and
• continuing to make enterprise education available in schools and through the third sector so that an enterprise culture is embedded from an early age and that everyone has the opportunity to gain the entrepreneurial skills needed to compete in the global economy.

Notes

11. Cabinet Office, Excellence and fairness: Achieving world class public services, 2008
12. Department for Innovation, Universities and Skills, Innovation Nation, 2008
13. Further information available at: /www.berr.gov.uk/dius/innovation/randd
14. Department for Innovation, Universities and Skills, Annual innovation report, 2008
15. Department for Business, Enterprise and Regulatory Reform, Enterprise: unlocking the UK’s talent, 2008