By Marcus Leach

Innovation, research and development need to be at the top of a business’ to-do list, and not just an aspiration, according to Clydesdale and Yorkshire Banks.

Six months after Chancellor George Osborne announced an increase in research and development tax relief which was welcomed by UK small businesses (SMEs) at the time, Clydesdale and Yorkshire Banks believe UK companies are well-positioned be at the forefront of global innovation and developing new products and services.

UK businesses have a worldwide reputation for innovating ground-breaking products and services.

Colin Fyfe, Divisional Director for Clydesdale and Yorkshire Banks, said inspiring innovation should also be top of the agenda for economic influencers.

“Whether it’s through television programmes such as Dragon’s Den or Government support, for entrepreneurs, innovators and inventors, having an environment where business ideas can be fostered and supported with the appropriate advice and financial support is extremely important," he said.

“Businesses can’t afford to stand still at the moment. That’s not to say they should be exuberant in their development plans, but constantly sharpening their service and looking to fill gaps in the market are important exercises businesses should go through.”

This opinion is supported by the Banks’ study of more than 1,300 UK businesses which showed, despite continuing economic uncertainty, a quarter of UK businesses will be investing in new product development to encourage growth and innovation in the year ahead.

“We asked UK businesses about their investment intentions in the year ahead and found that almost half (46%) of UK businesses plan to invest at least five per cent of their annual turnover in growth strategies such as R&D programmes in the next twelve months,” Fyfe continued.

Nearly one in five (18%) of businesses questioned said assistance with R&D costs would do most to encourage growth for their business.

“Businesses must be constantly looking for new ways to help their companies grow in order to succeed, and our research shows that people are clearly aiming to take that approach,” Fyfe concluded.

“Our commitment to supporting trading and forward-thinking businesses is stronger than ever and we continue to attract growing numbers of small and medium sized businesses — all of which is evidenced by the fact that we delivered our two-year promise to make £10 billion of gross new lending to business and personal customers, ahead of our October 2011 target date.”

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