Employing and nurturing creative people is more important for Yorkshire business innovation than striving to come up with a bright idea, according to new research by Yorkshire Bank.
The new survey suggests small businesses in Yorkshire 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), more than half of respondents in Yorkshire (57 per cent), said having the right people and skills is the single most important factor for a business to be innovative. This is compared to less than a quarter (21 per cent) who believes having the right idea is most important.
As a result, the research suggests Yorkshire 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. Less than half (47 per cent) of respondents feel the UK economy fosters innovation but this increases to 60 per cent 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, less than a quarter (23 per cent) of businesses have ever accessed Government incentives such as R&D tax credits or Patent Box, with only the same amount (23 per cent) planning to do so in the future.
The approach to financing innovation and creativity is also mixed, with only 40 per cent of SMEs in Yorkshire setting aside a dedicated budget for research and development.
SME experts at Yorkshire 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 per cent to 80 per cent.
Encouragingly and according to the survey, it appears there is an increasing number of businesses which understand the value of their intangible assets – assets such as a company’s brand or intellectual property.
Nearly half (43 per cent) of Yorkshire businesses said they had an accurate understanding of the value of their intangible assets. Six months ago only 38 per cent were able to say the same when asked the identical question by the Bank.
Simon Wright, Regional Director of Business and Private Banking at Yorkshire Bank, 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 Yorkshire Bank launches its fifth Business Week – its celebration of British business.
The theme for Yorkshire Bank’s 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.
In Sheffield on Tuesday, leading technology strategist Paul Papadimitriou will discuss what the next five to ten years holds for innovation and technology.
In Leeds on Thursday, England Rugby coach Mike Catt will discuss how continued innovation in technology and tactics evolve to benefit teamwork to achieve success.