|
Getting your Trinity Audio player ready...
|
Introduction
UK businesses are planning to spend money on innovation over the coming months going into 2026, despite the uncertain economic climate in the country. There is a widespread belief that innovating through adversity is the best way to ensure future growth prospects.
These findings are according to a 2025 research survey conducted by Alibaba.com, where over 48% of UK SMEs surveyed stated that they plan to increase investment into product innovation and research and development (R&D) activities. These positive innovation plans are despite the UK’s current challenging business conditions due to continued rising costs. 86% of businesses questioned believe that product innovation is a key driver of business growth and future success. The survey had a number of other interesting findings, which are outlined below:
Where Are SMEs Planning To Focus Their Innovation Spending?
i) 35% plan to carry out R&D activity into improving existing products
ii) 33% want to channel investment into responding more directly to customer needs
iii) 27% want to use new product innovation to disrupt the market and gain a competitive edge over business rivals
What Are The Main Obstacles To Innovation For SMEs?
i) 50% believe the cost of innovation or financing R&D is too high
ii) 32% are struggling to keep up with the fast pace of change in technology within their sectors
iii) 26% lack the in-house capabilities and resources to drive innovation forward
iv) 20% believe they don’t possess the required expertise or knowledge to innovate
What Are The Main Ways SMEs Plan To Overcome Innovation Barriers?
In line with findings from other reports this year, it comes as no surprise that 59% of SMEs plan to adopt digital tools and increase the use of AI to help support product innovation and help spark creativity.
SMEs are also able to access help to fund research and innovation costs by applying for grants and loans from a number of providers within the UK, Europe and further internationally. Businesses can regularly check Government funding providers such as Innovate UK and other funding providers that fall under the UK Research and Innovation network to see if grants are available that align with specific research and development goals for their projects. There are also innovation grants available on a local level, typically issued by local authorities, business enterprise support agencies and universities.
What Are Some Of The Latest UK Business Innovation Funding Opportunities Available?
i) Rolling Opportunity Seeds
ARIA is running a scheme to support scientific and technological breakthroughs and award funding to small but highly ambitious projects, known as “opportunity seeds” to support ambitious research aligned to their opportunity spaces. This rolling open call seeks proposals for projects that sit within the following opportunity spaces – Mathematics for Safe AI, Scoping Our Planet and Nature Computes Better. Funding of between £10,000 and £50,000 is available.
Application Deadline: Applications are invited on an ongoing basis
ii) Promoting Innovation Pathways Programme
Staffordshire Chambers of Commerce is running a UK Shared Prosperity Fund backed programme that aims to support SMEs and early-stage start-ups across Stoke-on-Trent to develop new products, services and processes. The programme includes a grant to support the purchase of capital equipment, prototyping, software costs, engagement of researchers and consultants and IP costs. Funding up to £5,000 is available.
Application Deadline: Applications are invited on an ongoing basis
iii) High Growth Accelerator – Innovation Vouchers
East Midlands Chamber is running the High Growth Accelerator, backed by the UK Shared Prosperity Fund. The scheme is providing vouchers to provide SMEs access to specialist support from university technical innovation centres. Businesses from Derby, Derbyshire, Nottingham or Nottinghamshire are all eligible to apply. Manufacturing and Engineering, Green Energy and Technology, and Creative and Digital industries will be a particular focus for the project. Funding up to £5,000 is available.
Application Deadline: Applications are invited on an ongoing basis
iv) Water Efficiency Lab
Ofwat is running a competition that aims to attract the most innovative solutions to specific water efficiency challenges and unlock progress on water efficient technology, processes and approaches. The water sector in England and Wales is at risk of falling short of its long-term goals for water efficiency and the new research and development from businesses and other partners aims to make improvements across the whole network. Funding between £150,000 and £1.5 million is available.
Application Deadline: 10th March 2026
v) TechX Clean Energy Accelerator
The Net Zero Technology Centre is running an accelerator that aims to support clean energy start-ups at technology readiness level 3 to 6 with clear potential to accelerate the transition to an affordable net zero energy industry. The scheme is open to start-ups globally. Funding up to £50,000 is available.
Application Deadline: 5th January 2026
vi) Delivering Future Advantage through Testing and Evaluation (Phase 1)
The Defence and Security Accelerator has a competition that invites proposals that present innovative/novel solutions for development of deployable Test and Evaluation (T&E) capabilities and the development of regulatory solutions (process or technology), ensuring that the UK’s T&E enterprise becomes and remains innovative by instinct. The scheme is part of the MOD Test and Evaluation (T&E) Transformation Programme. Funding up to £250,000 is available.
Application Deadline: 20th January 2026
vii) Increasing EV Charging Capacity on the Strategic Road Network
Innovate UK and the Office for Zero Emission Vehicles is running a competition that aims to support the development and demonstration of solutions to increase public Electric Vehicle (EV) charging provision for longer journeys on the Strategic Road Network. Funding between £500,000 and £3 million is available.
Application Deadline: 25th March 2026
viii) Innovate UK Innovation Loans Round 24
Innovate UK is providing loans to support close to market innovative projects with strong commercial potential. Projects must lead to innovative new products, processes or services that are significantly ahead of others currently available, or propose an innovative use of existing products, processes or services. Funding between £100,000 and £5 million is available.
Application Deadline: 7th January 2026
How To Apply For Business Innovation Funding Schemes
Full details about how to apply for schemes and the eligibility criteria is available on each individual scheme page on the relevant website. Any deadlines, who can apply and what eligible costs the grants will cover will also be outlined on these pages. Interested individuals and businesses can speak to innovation funding advisors based at each provider who can guide them through requirements and eligibility criteria to see if the relevant funding is a match with their needs and help them to apply. There are also application forms and other supporting guidance available on scheme pages as well.
Want To Find The Latest UK Business Innovation Funding Opportunities?
If you want to see the full set of UK business innovation funding currently available, please visit https://getbusinessgrants.com/