Introduction
According to the Innovation State of the Nation Survey 2026 by the Innovation and Research Caucus, 60% of UK businesses stated that they undertook product and service innovation in 2026, which is the same position as 2025 and up from 56% in 2024.
Figures were available as a regional breakdown of innovation levels across the UK
Top Performing Regions
The North East of England was the region with the biggest increase in 2026 at 75% up from 57% in 2025 also making it the most innovative region in the country. The North East was the least innovative area when the survey began in 2023 at just 47%.
South West England saw the second best increase in innovation levels at 67% in 2026, up from 54% in 2025 and ranking it as the joint second most innovative region in the country alongside North West England. The next in the rankings were London and Scotland, both on 63% and South East England on 62%.
Low Performing Regions
Wales was the area with the worst innovation performance with a level of 48% in 2026, down from 58% in 2025 and also making it the least innovation region in the UK. What is highly surprising is that Wales was the most innovative area in the UK in 2023 at a level of 70%, meaning that over the last 4 years the most innovative and least innovative areas of the country have swapped places.
Northern Ireland saw its innovation levels fall to 57% in 2026 down from 65% in 2025, giving it the second worst performance drop after Wales. However, despite this dip, Northern Ireland still ranked higher in 2026 than Yorkshire and Humber, West Midlands and East of England all on 56% and East Midlands on 53%.
In terms of performance levels across business size, innovation levels were as follows in 2026
- Micro Businesses – 56% (-2% year-on-year)
- Small Businesses – 63% (+2%)
- Medium Businesses – 73% (+8%)
- Large Businesses – 79% (+4%)
This shows the ongoing pattern and trend that larger businesses find it easier to carry out innovative activities than smaller ones, due to larger budgets and fewer barriers to innovation.
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. For international grants, businesses can explore funding available from the European Commission as part of the Horizon Programme.
What Are Some Of The Latest UK Innovation Funding Opportunities Available?
i) Innovate Essex Fund – Develop
Essex Growth Agency and The University of Essex are running a fund that aims to support the delivery of innovation-led projects that deliver economic growth across Essex. Develop is designed for businesses ready to pilot, trial or implement an innovative product, service, technology or process. Funding up to £15,000 is available.
Application Deadline: Applications are invited on an ongoing basis
ii) BridgeAI Deployment Catalyst: AI for Decision Critical Systems
Innovate UK is running a scheme for UK businesses to apply for funding to deploy Artificial Intelligence and Machine Learning solutions that support consequential judgements, recommendations or decisions. Funding up to £200,000 is available.
Application Deadline: 8th December 2026
iii) Scaling Implementation Innovation Grant
Scottish Enterprise is running a scheme providing funding to support businesses to implement activity that supports innovation, productivity, competitiveness and scale-up. Eligible costs can include internal staff time, temporary specialist placements, consultants, subcontracted activities, project materials, intellectual property costs and training costs. Funding up to £100,000 is available.
Application Deadline: Applications are invited on an ongoing basis
iv) HIE Innovation Programme – Research and Development Grants
Highlands and Islands Enterprise is running a grant that will help businesses access technical expertise or specialist knowledge to help them explore technical challenges, test ideas and bring innovations closer to market. Funding up to £100,000 is available.
Application Deadline: Applications are invited on an ongoing basis
v) Call for Proposals – Space Florida and UK Space Agency – Space Innovation Partnership
UK Space Agency is running a call that aims to stimulate collaborative innovation between UK and Florida space organisations, accelerating the development and commercialisation of cutting-edge space technologies. Funding up to £75,000 is available.
Application Deadline: 11th January 2027
vi) Local Innovation Partnerships Fund
West Midlands Combined Authority and UK Research and Innovation is running a scheme that provides funding and support to commercialise at scale for companies developing new products and services in creative industries, advanced manufacturing, and health and life sciences. Funding up to £1 million is available.
Application Deadline: Applications are invited on an ongoing basis
vii) Growth Cohorts: Next-Gen Low Carbon Concrete Cohort Entry Round 2
Innovate UK is running a competition that aims to recruit ambitious businesses to join a Growth Cohort which will fund and support businesses to accelerate their ambitions to decarbonise concrete. Funding up to £54,400 is available.
Application Deadline: 2nd December 2026
viii) Healthy Soils and Water for a Sustainable Environment
The Department for Environment, Food and Rural Affairs is running a competition that aims to fund collaborative development projects that deliver ambitious, commercially deployable solutions to the challenges associated with soil, water and environmental management in farming and growing production systems. Funding up to £3.5million is available.
Application Deadline: 28th January 2027
How To Apply For Innovation For Business 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 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.