To achieve greatness, a budding entrepreneur needs a great business idea. Flashes of inspiration have given birth to many of the UK’s top companies.
That inspiration often leads to innovation, which is the lifeblood of all major, developed economies. New materials, systems, medicines, hardware and software are the seeds of creative destruction – the ongoing process that oils the capitalist system. The UK remains a cradle for new ideas born out of our world-class universities, regional hubs and the minds of entrepreneurs in industries ranging from biotech to motor racing.
Sector at a glance
- In the past three years, the UK’s most innovative companies grew on average 50% faster than the least cutting-edge businesses
- UK businesses spend £24.8 billion on R&D each year
- Britain is home to 14 of the world’s top 50 universities
The innovators and the economy
The UK’s most innovative companies have enjoyed strong growth in recent years. From 2009 to 2010, the average company revenue climbed by 29.7 per cent to about £20 million. The following year, businesses reported a 22.7 per cent rise to nearly £25 million on average, while growth hit 18.3 per cent in 2012. By that point, the average revenue had soared to nearly £60 million.
Maintaining this growth and supporting innovative businesses is essential to the UK economy’s prosperity, according to the Confederation of Business Industry. "An internationally competitive innovation eco-system lies at the heart of a vibrant, modern economy. For the UK to remain a destination of choice for inward investment, it is essential that government, business and academia work together in the development and demonstration of new technologies, alongside harnessing the skills base across the research and innovation talent pipeline.
Driving the economy
Commentary by Mike Hawes, CEO, the Society of Motor Manufacturers and Traders
The UK remains the only major European market that can boast a consistent rise in new car sales. With consecutive growth in the past 19 months (correct at the time of writing), the automotive industry is a strong indicator that economic confidence is increasing among consumers.
This year, new car registrations are set to exceed 2.2 million units, with buyers attracted by a range of exciting new cars with increasingly fuel-efficient, safe and technologically advanced features. UK manufacturing is helping to lead the charge with the Nissan Qashqai, produced in Sunderland, and the Halewood-built Range Rover Evoque among the UK’s best-sellers. Equally impressive is that 80 per cent of the 1.6 million vehicles made in the UK are exported to more than 100 countries worldwide. With the sector turning over £60 billion annually, it accounts for about 10 per cent of the UK’s total export value and helps to employ more than 700,000 people.
"80 per cent of the 1.6 million vehicles manufactured in the UK are exported to more than 100 countries"
The automotive industry’s contribution to the UK economy is driven by diversity. More than 30 brands build in excess of 70 different vehicles in this country. Every 20 seconds a new car rolls off a UK production line, whether it’s a world-famous Mini in Oxford, a McLaren supercar in Woking or the finest in high-luxury vehicles from companies such as Rolls-Royce and Bentley.
The UK doesn’t just make cars – this year, Vauxhall built 900,000 Vivaro vans in Luton, while DAF Trucks near Preston is one of the world’s most popular commercial vehicle brands. BMW, Ford and Toyota also contribute to more than 2.5 million engines built here each year. There is also the value of the UK supply chain to consider, with brands such as Jaguar Land Rover investing heavily to ensure that new models use as many UK-sourced components as possible. So, it’s little wonder that UK suppliers generate some £4.8 billion of added value each year.
While the global automotive market is hugely competitive, the UK successfully attracts additional automotive manufacturing investment. Companies are drawn to the UK for our engineers’ expertise, the competitive nature of our economy and the supporting general infrastructure. These benefits are promoted heavily by the Government, which continues to champion our industry at home and abroad.
This year alone, in excess of £2.6 billion investment has been announced, which will increase production, development and jobs. In a few years, the UK could be making more cars than ever before. Just as importantly, it may also become recognised as one of the leaders in developing new, especially low-carbon automotive technology.