Regular readers of this blog should take a look at the Infor Manufacturing Blog.*
My first post for the blog looks at why investment in innovation and IT have helped manufacturers drive the broader economic recovery. However, I also flag up some of the key challenges firms face when innovating in the UK:
"Tackling technical troubles [while innovating] can cost firms time and money as they strive to get to market quickly.
Yet in competitive global markets, time and money are luxuries that most manufacturers do not have."
UK manufacturers don’t compete on price or labour, they compete on innovation and technology. The longer it takes, the more cash is spent in developing and commercialising innovation, the less likely the company will generate a return on its investments in innovation.
What does this mean for the Chancellor's Budget in under two weeks time? Well, R&D tax credits could play a part here.
Right now, the UK only provides tax credits for research and tax breaks for patents. Yet it’s the time-consuming and costly development phase of R&D where the value of innovation – the profits, the jobs & the growth – is generated. And because we don’t support development and commercialisation, other countries reap the economic benefit of our innovative ideas.
The bottom line is that we can't take growth for granted: firms will invest, innovate and grow; they have to if they want to stay in business. The question is whether the Chancellor give them a reason to invest, innovate and grow in the UK?
* Full disclosure: Infor and EEF have a long-standing relationship. This includes partnering with our economists on two reports: the 2008 IT & Productivity survey and our 2010 Innovation Monitor. Infor are also the lead partner for EEF's Future Manufacturing Awards.