Without R&D we won’t grow
As the managing director of an SME I am forced to constantly think about how my business will grow. Without growth we will eventually stagnate and possibly die. As we have a mature product portfolio I can only grow the company through acquisitions or by new product development. Both can work, but both carry risks. The latter requires good market knowledge and then plenty of investment into R&D to produce the answer to our customer’s problems and therefore (hopefully) sales! Put simply, without investment in focussed R&D we will have no new products, we won’t grow and we’ll probably die.
The need to grow and rebalance our economy
In many ways I believe this simple model can be extrapolated to the UK and our need to grow and to rebalance our economy. I was brought up regularly debating the mantra that wealth is only created through mineral extraction, agriculture or manufacturing. In the UK I believe we have a unique opportunity to harness our remarkable world-class academic and technical capabilities to develop a wide range of globally competitive products and businesses that can generate this wealth.
Differentiation through technology and creativity
The UK sits in an increasingly difficult environment of high energy costs, relatively high regulatory burden and, depending on the region, high labour costs. It is therefore imperative that we differentiate ourselves from other parts of the world where energy is cheap (US post fracking) or the enormous scale of production and proximity to supply churns out highly competitive products (Asia). Such differentiation can come from technology and creativity.
Treating the UK like a company
If I was running the UK today (I’m pleased I’m not) I would be tempted to treat it like a company and make a clear decision to invest heavily in R&D to ensure a future full of new products to fuel stability and growth. While I’m sure that the view from the top is not quite so simple, there is a serious message here that failure to support innovation and new product development in pursuit of short term cost savings is a dangerous precedent.
The impact of cutting R&D is felt in the future
As a family business we look at long term investment cycles, sometimes up to ten years. It is worth noting that right now we are feeling the impact of cutting back on R&D in the 2008 recession as we have very limited new products to offer the market. There is no quick fix to this. The best solution is to make sure we invest as much as we possibly can in R&D and innovation all the time, through thick and thin, to ensure that ten years from now we will enjoy a growth bonanza.
I only hope that the UK makes the same decision otherwise the next ten years will be sorely lacking in wealth creators.
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