The CEO of a leading research and innovation centre based in the North East is calling for greater SME connectivity and support from government, in order to realise its Industrial Strategy ambitions.

Chris McDonald, CEO of the Materials Processing Institute, was speaking at the British Academy, in London, at an event focused on SMEs and how they can make the most of public R&D investment.

At the event Mr McDonald was present in his role as Policy Chair for Innovation and Enterprise at the Federation of Small Businesses (FSB).

The FSB is leading the way on promoting innovation diffusion, relating to the Industrial Strategy, which can boost productivity and benefit the wider economy.

In 2017, the Government announced its Industrial Strategy, which outlined 10 strategic pillars, including upgrading infrastructure, supporting business growth and investments in science, research and innovation. It has committed an additional investment of £4.7bn by 2021 in R&D funding, with the majority channelled through research councils and schemes within selected industries.

Mr McDonald argues that it is vital for government to address the barriers facing innovation diffusion so SMEs can benefit from public research, allowing them to spread the rewards of public R&D investment.

Chris said: “The key challenge for the future of UK industrial innovation is SME connectivity, to address the barriers of innovation diffusion and availability of capital expenditure, through support delivered locally.

“UK SMEs are not asking for elaborate grant schemes, but they do need focused support. The Government’s focus needs to be much more on rebalancing in support of process development, which will enhance productivity, rather than towards new product introductions.”

Chris added: “Despite capital expenditure being a barrier to the delivery of new innovations, SMEs in general are reluctant to access locally available grants. The R&D tax credits scheme is well established and yet it is reported that only 5% of SMEs participate.

“There needs to be an enhanced scheme of capital allowances, which would be more directly suited to the culture of entrepreneurial small businesses.”