Not owning IP rights means SMEs are missing out on huge opportunities for growth and investment, affecting their ability to survive the downturn caused by the pandemic. The research also highlighted that business investment in IP was more resilient to the pandemic than investment in physical assets, showing the true value of SMEs taking advantage of IP rights.

Not only that, SMEs are the backbone of the UK economy so their inability to commercialise their ideas and obtain IP protection results in less overall market growth and impacts the wider economic recovery the UK desperately needs.  

To fix this, the report, Prosperity Pending, showed a need for a more integrated policy to incentivise SMEs to own IP rights. Currently, the UK Government provides businesses with tax credits in return for R&D activity and patents, but report analysis showed that the UK patent box could play a greater role in driving the UK’s IP investment, particularly amongst SMEs.  

GovGrant recommends that a more integrated policy would address this by providing consistent support throughout the R&D phases through to commercialisation, acknowledging the barriers faced by businesses, particularly SMEs, at every stage. The report also notes that to support SMEs fully, the current UK Patent Box scheme needs to be diversified to include other forms of IP (aside from patents) and more accessible methods of obtaining them to encourage innovation. 

Prosperity Pending is available to download in full here.  

Luke Hamm, CEO, GovGrant, commented: “SMEs face a number of barriers when it comes to investing in R&D and IP rights. As SMEs make up a large proportion of the UK economy, it is clear that these barriers need to be removed for both the success of individual businesses and the wider economic prosperity of the UK. Policymakers have consistently pointed to innovation as a key driver in the UK’s economic recovery and Rishi Sunak noted the need to give every business the opportunity to innovate and grow in his Spring Budget, but this research shows we still have a long way to go.  

"There is much to be proud of, especially as the UK are world leaders in academia, but we need to focus on turning our strengths into commercial gain for a thriving economy in the months and years to come. This report should set the precedent for change. Businesses need to understand the value of IP for commercial value and policies need to be adapted with the needs of SMEs in mind.” 

Rain Newton-Smith, CBI Chief Economist, said: “The UK is home to some of the most pioneering firms in the world - large and small - as well as renowned research and innovation institutions. As the UK builds back better from COVID-19, a dynamic innovation economy is essential to compete globally, attract investment and create high-quality jobs.  

“It’s great to see Government setting out the ambition to be a science superpower. We’re starting from a position of strength, but we are missing the long-term plan and investment to get us there. More than ever, the UK needs clarity and predictability when it comes to funding and incentives for innovation - enabling long-term, strategic investment from government and businesses of all sizes. The upcoming Innovation Strategy and Spending Review later this year needs to deliver on both.”