Can Innovation Help To Tackle The UK’s Cost Of Living Crisis?
The government’s innovation-friendly approach to regulation is being described as a serious stepping stone on the road to establishing the UK as a major global force in science and technology, but virtually any business can benefit from solving problems and expanding horizons.
The exploding cost of living’s putting serious pressure on households and businesses across the country and, while there’s no sugar coating to mask the bitter taste of that pill, research and development is still the surest, clearest way forward. With government figures showing almost 600,000 UK businesses were already undergoing “significant financial distress” by the 4th quarter of 2021, it’s going to take big ideas and bold moves to guide us through the challenges ahead. Along the way, we’ll be dealing with supply chain disruption, faltering consumer confidence and the highest inflation rates we’ve seen in 40 years. The cost of keeping both the literal and figurative lights on are skyrocketing as energy prices continue to spike sharply, while real-terms wages lie stagnant against a backdrop of rising bills for transportation, food and many other day-to-day essentials.
In the face of these challenges, UK firms are making tough choices, revising their expectations and limiting their ambitions. For some, that means putting up their own prices or pulling previously outsourced work back in-house. Others are looking into alternatives to their established business models, such as transitioning into subscription-based services. A great many are putting a hold on their overall plans for growth to ensure enough cash keeps flowing through their businesses to keep the pilot lights burning.
It’s not a pretty picture—but it’s not the whole picture, either. While it’s absolutely critical to acknowledge the sheer scale and scope of the challenges both companies and their customers are tackling, leaning into the core spirit of innovation that powers so much of UK business has a great deal to offer in terms of tactical planning and practical solutions. The government’s innovation-friendly approach to regulation is being described as a serious stepping stone on the road to establishing the UK as a major global force in science and technology, but virtually any business can benefit from solving problems and expanding horizons. Schemes like the government’s £12 million “regulators and pioneers fund” are already pumping critical cash into ambitious projects ranging from advances in delivery drone technology to “deep learning” algorithms for use in the healthcare sector. Meanwhile, businesses are finding new and innovative ways to cut costs and increase efficiency. The move toward remote working has been a great example of this, given that typical annual UK office costs run close to £7,500 per worker.
As the cost of living crisis pours pressure on individuals, their demands and expectations shift as well. We’re seeing this quite clearly in the fintech sector, for instance, where more and more customers are looking for innovative credit options and increasingly comprehensive banking and budgeting apps. Answering those types of need, naturally, requires investment in research and development—and the risks that come with it.
When you’re innovating toward success—or even simple survival—knowing the battlefield is essential. The intense focus being placed on the cost-of-living crisis does at least show we’re taking the situation seriously, but it also means that we know in great detail what we’re up against. Unlike the essentially unprecedented challenge of the COVID-19 pandemic, times of economic hardship are a familiar enemy. That in itself offers an edge to innovators in terms of planning and risk management. With innovation and R&D investment becoming core survival strategies rather than optional competitive advantages, maximising the benefits of R&D tax relief is more important than ever to businesses of all types and sizes. Efforts ranging from reducing costs and waste to working toward a Net Zero UK by 2050 all require innovation and investment. Understanding which of the costs you’re paying and risks you’re taking qualify for R&D Tax Credits is the key to making those projects and processes truly successful. Not every experiment may pay off as hoped. In fact, that’s an accepted, essential part of the innovation process. However, failed projects can still qualify for tax relief, since they can still offer vital contributions toward the pushing back of our collective boundaries.
If you're in the business of solving problems and breaking through barriers, you could be due invaluable R&D Tax Relief.
We can help you identify historic qualifying activity and get the credit you deserve - Get In Touch | Contact Us | RIFT R&D (riftresearch.com)