intelligent

In terms of financial incentives , half of the respondents say additional government grants would encourage them to innovate , and 46 % say extra tax relief would do so .

To move our society from low or no economic growth , we need to see more businesses free and empowered to experiment and try new ways of working , as well as a more ambitious pathway for start-ups to shake up the marketplace and change the world .

To achieve this , FSB put forward a list of recommendations to government , including :

• Spend the equivalent of at least 10 % of the overall Research and Development budget on the diffusion and adoption of innovation . R & D and the invention of new products only has an economic impact if they are widely used . If the point of spending public money on R & D is to boost UK productivity , which could provide good examples to consider . As they are always oversubscribed , expansion of Innovate UK ’ s Smart Grants should also be considered .

• Introduce a ‘ modernisation and diversification tax relief scheme ’ based on R & D tax relief . This scheme would provide small businesses tax relief for those who have invested in significantly improving products or processes . R & D tax relief is currently focused on firms developing new products through science . This is a narrow way to view innovation ; improving products and processes brings similar financial benefits to firm . A new scheme , with the tax relief set slightly lower than the current R & D

BUSINESS SUPPORT CONTINUES TO BE POORLY FUNDED AND CONSTANTLY CHANGING . tax relief , would encourage more firms to improve their products and processes .

An inclusive , entrepreneur-led approach is key to incentivising small business owners to take risks and develop new solutions . Policymakers need to have a broader understanding of how tech adoption and innovation is not only confined to big firms . � there needs to be recognition of the importance of small businesses taking up new or improved products or processes . The UK government has brought forward different support schemes to enable more companies to adopt innovation , but these have been poorly funded and short-lived . Similarly , business support continues to be poorly funded and constantly changing . Only through significant commitment can business support schemes be a success .

• Set itself a target that half of all direct government BERD funding should be directed to SMEs . It is important that small innovative businesses also benefit from this support . The OECD highlights that a number of countries , such as Australia , Estonia , Ireland and Luxembourg , have introduced direct SME-targeted funding ,

Tina McKenzie , Policy Chair , Federation of Small Businesses