|
Getting your Trinity Audio player ready...
|
Introduction
According to Innovate UK’s State of Innovation Report 2025, innovative businesses are finding their average sales growth increased by 7% over the last year, which is well above the average for non-innovators, where growth stagnated at 0.4%. There is even more impressive sales growth for “frontier firms” at 9% over the last year. Frontier firms are those consistently using research and innovation activities to introduce new cutting edge products and services within their industry sector.
In terms of engagement in innovation activity, 60% of UK businesses surveyed have made changes to products and services over the last year, which is an increase from 56% in 2024. Looking ahead, 51% of UK businesses plan to invest in research and development activity over the next 12 months, this is up from 47% in 2024. This figure increases for frontier firms with a planned research and investment rate of 71%.
There are reports of barriers to innovation across the UK with 49% of businesses surveyed citing there were hurdles to their R&D activities. The top barriers were as follows:
- 74% cited lack of access to finance from private sources such as banks and equity finance providers.
- 50% were concerned about uncertainty in demand within their sector
- 50% believe barriers have been created by UK regulations and standards
- 45% were unable to access funding from public sources, such as grants and other Government-backed funding
In terms of businesses accessing external finance to fund their innovation activities, there was a year-on-year increase across the board in 2025:
- Grant activity increased by 2%
- Government loans 6%,
- Bank loans 7%
- Equity finance 8%.
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) Innovation Grants (March 2026)
The Offshore Wind Growth Partnership is running a scheme that aims to support innovation projects that will lead to the commercialisation of products, services, and technologies that will accelerate and optimise offshore wind consenting and ongoing site development. This round is focused on Industrialised Foundations and Substructures and Substations and Electrical Design. Funding up to £200,000 is available.
Application Deadline: 20th March 2026
ii) Robotics Adoption Programme Skills Development
Innovate UK is running a competition that aims to create and deliver course content and materials that will support skills, talent and training in robotics. For this competition robotics includes drones operating on land, sea and air, autonomous plant and service robots and industrial robots or automated machinery that use sensors, actuators and control software. Funding up to £500,000 is available.
Application Deadline: 25th March 2026
iii) Conflict Wounds – From Biology to Battlefield Solutions
The Defence and Security Accelerator is running a competition seeking innovations that will improve understanding of and develop treatment options for conflict wounds. The competition is split into 2 challenges, which are Modelling Conflict Wounds and Treating Conflict Wounds. Funding up to £300,000 is available.
Application Deadline: 24th March 2026
iv) Advanced Manufacturing Supply Chain Innovation FS
Innovate UK is providing a competition for Businesses and research and technology organisations to apply for funding to support feasibility studies to explore new ways of making supply chains more resource efficient and resilient in the advanced manufacturing sector. Funding up to £100,000 is available.
Application Deadline: 11th March 2026
v) Great Ideas
York and North Yorkshire Combined Authority is providing a fully funded programme that aims to support businesses to innovate and grow, whether they are looking to launch a new product, improve their processes, or explore new technologies. The program provides practical guidance and expert support, as well as access to potential funding opportunities. Funding up to £60,000 is available.
Application Deadline: Applications are invited on an ongoing basis
vi) Open Call for Proposals – Kick-Starts (March 2026)
The European Space Agency is funding six-month ‘kickstart’ studies to develop services for any sector. Kick-Starts must involve the use of at least one space asset, such as satellite communications, satellite Earth observation, and satellite navigation. Funding up to £75,000 is available.
Application Deadline: 28th March 2026
vii) DRIVE35 Innovation Fund: Collaborate
The Department for Business and Trade is running a competition that aims to support businesses with late stage collaborative research and development projects that will support the UK’s transition to zero emission vehicles and a pathway to a net zero automotive industry. Funding of between £2.5 million and £25 million is available for collaborative group projects.
Application Deadline: 11th March 2026
viii) Research Software Maintenance Fund
The Software Sustainability Institute is providing researchers with an opportunity to apply for funding to support and maintain existing research software or sustain a team responsible for multiple software tools. Applicants based in UK businesses can be included as Project co-Leads. Funding up to £150,000 is available.
Application Deadline: 25th February 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.