The share of UK businesses classed as innovation-active fell to 34% in 2022-24, deepening concerns about a long-term decline in business innovation and the country's future competitiveness. This figure compares to 53% just a decade earlier, a drop of 19 percentage points.

The National Centre for Universities and Business (NCUB) warns that the trend threatens the UK's growth prospects at a time when productivity and investment remain under pressure.

The latest figures build on evidence that UK innovation activity had already fallen to a decade low. Despite growing political emphasis on science and technology, fewer businesses are engaging in innovation, highlighting persistent barriers to R&D investment and the commercialisation of research.

Rosalind Gill, Director of Policy at NCUB, said:

"A shrinking base of innovative businesses is a serious concern. Innovation is not confined to a handful of frontier sectors or high-growth companies. It depends on businesses across the economy investing, adapting and bringing new ideas, products and services to market.

"The UK has many strengths. We continue to produce world-class research, generate promising discoveries and collaborate effectively across institutions. Innovation is not created by research alone, however. It depends on businesses investing in R&D and innovation, shaping demand, adopting new technologies and working with the research base to solve real-world challenges. The UK has made significant progress in strengthening these connections over recent decades, but there remains considerable scope to do more. At a time when economic growth is a national priority, we need to be even more ambitious about how we translate our research strengths into business investment, commercial activity and economic impact.

"It is therefore encouraging that Government has now placed growth and innovation at the centre of its economic agenda. Significant reforms are already underway across the UK's research and innovation landscape, including changes to UK Research and Innovation (UKRI) and the development of a new Industrial Strategy.

"When we speak to business leaders, they consistently highlight the importance of clearer long-term priorities, stronger pathways from research to market, reduced complexity across the research and innovation system, and greater confidence that the UK is a place where innovative firms can start, scale and succeed.

"That is why the future role of UKRI is so important. We should be thinking carefully about how it can help strengthen the pathways between research and economic impact. The prize is both a stronger research system and a stronger innovation economy."

Notes

* Source data: The figures cited are drawn from the UK Innovation Survey (UKIS) 2025 report, published 4 June 2026 by the Department for Business and Trade (DBT) and administered by the Office for National Statistics (ONS). The survey covers the period 2022-2024. The full report is available at: https://www.gov.uk/government/statistics/uk-innovation-survey-2025-report

* Definition of 'innovation active': A business is classified as 'innovation active' if it introduced a new or improved product or service, introduced new or improved business processes, or was engaged in innovation projects not yet complete or abandoned during the survey period. This definition is based on the OECD Oslo Manual 2018.

* In 2022-2024, 34% of UK businesses were innovation active -- a decrease from 36% in 2020-2022.

* In 2022-2024, 47% of large businesses (250+ employees) were innovation active, compared to 34% of SMEs (10-249 employees).

* Decline across all business sizes: The pattern of innovation activity being lower in 2022-2024 than 2020-2022 was replicated for all businesses, both SMEs and large businesses, including within the longitudinal panel data covering 4,474 businesses that responded to each of the last three surveys.

* Decline in investment: There were decreases in the percentage of businesses investing in all innovation activities between 2020-2022 and 2022-2024, with the single exception of training. The largest decrease was in design activity investment, which fell from 12% to 9% of businesses.

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NOTES TO EDITORS

About the NCUB

The National Centre for Universities and Business (NCUB) represents a collective voice of leaders across higher education and business and aims to tackle issues of shared interest. The NCUB is an independent and not-for-profit membership organisation that promotes, develops and supports university-business collaboration across the UK. The organisation was originally established in 1986, and NCUB was formed in 2013.

For more information please contact:

Benjamin Jackson (He/him)

Communications Manager

National Centre for Universities and Business (NCUB)

E: benjamin.jackson@ncub.co.uk

Telephone number: 44 20 3763 3118

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