Innovation continues to deliver growth in the UK, according to 2025 report

Businesses that innovate achieve greater sales growth than others, indicating innovation is strongly related to growth, as shown in Innovate UK’s State of Innovation 2025, published on 22/12/2025.

"This trend is amplified further by ‘frontier firms’, those which are the first to introduce new products or services compared to their rivals. These firms reported a 9% rise in revenue growth, a consistent pattern over the past three years," according to UK Research and Innovation (UKRI)

The report also noted that innovation was starting to rise again after slowing due to social and economic disruptions: "60% of businesses reported making changes to products or services over the last year, an increase from 56% in 2024 and a return to 2023 levels. 76% of frontier firms innovated over the last year, up 68% from the year before."

Businesses identified a lack of bank or equity financing as the primary barrier to innovation. They also reported an increased use of external finance for their innovation activities, with the use of grants up 2%, government loans up 6%, bank loans up 7% and equity…