MCA Report: Government must promote innovation now to protect UK competitiveness

Management consultants have joined the growing number of those who are pressing for innovation to be a key theme of this year’s Budget.

A new report, Innovation – Protecting the UK’s Competitiveness, published by the Management Consultancies Association (MCA), says that the government must act now to promote innovation in UK businesses in order to protect the UK’s long-term competitiveness.  The report, based on a survey of consultants who work with more than 90 of the FTSE 100, found that 9 out of 10 UK companies have cut their capital expenditure (a key measure of innovation) by up to 50% – which averages out as a projected fall of almost £4bn in R&D spend in 2009.  4 out of 5 respondents believe that the UK’s long term competitiveness is being damaged by lack of investment – with 9 out of 10 respondents citing innovation as a crucial tool to mitigate the effects of the recession.

Over two thirds of respondents supported increased tax breaks for R&D and other capital investment as the most important step the Government could take to encourage innovation in business.  The MCA recommends that the Government should announce such measures in the Budget this week.

Alan Leaman, Chief Executive of the Management Consultancies Association said:
“British businesses and the government need to look beyond the immediate economic crisis. As soon as innovation stops, companies slip down the league table and start to lose customers and their drive.  If companies are not able to innovate, they risk being unable to compete on the world stage.  The government needs to act now if it is serious about protecting the UK’s long term competitiveness.”  
The report also finds that the main barrier to innovation during the recession is that most managers are concentrating resources on short term priorities.  The MCA argues that companies need strong leadership from senior management to counter this.  Almost two thirds of respondents agreed that if businesses wish to seize the current opportunities and be innovative during and after the recession, inspirational leadership is the most important factor.

For a copy of Innovation – Protecting the UK’s Competitiveness, please contact Hilary Downes at or tel: 020 7321 4810. This MCA report contains up to the minute insight on innovation and the recession from leading consultants in the following MCA member firms:

  • Accenture
  • Arup
  • Atos Consulting
  • Boxwood Ltd
  • Compass Management Consulting
  • Digital Public
  • IBM
  • PA Consulting
  • PricewaterhouseCoopers
  • Right Management
  • Tata Consulting
  • Turner & Townsend
  • Vertex



For more information, please contact:

Hilary Downes
Press Officer
Management Consultancies Association
Tel: 020 7321 4810 / Mobile: 07943 805594
David Pippett
DWP Public Relations
Tel: 01225 833745 / Mobile: 07899 798197

About the Management Consultancies Association
The MCA was formed in 1956 to represent the consultancy industry to its clients, the media and government.  Management consultancy is an increasingly important industry for the UK economy with management consultancy revenues for 2007 estimated at around £8bn.  MCA members represent around 70% of the UK consulting sector, employ around 30,000 consultants and work with most of the FTSE100 and all government departments. Eight of the top ten UK-based consulting firms (by consulting fee income) are members.        

The MCA supports its member firms with a range of services including events, publications, interest groups and public relations. The Association also works with its members to attract the top talent into the industry. The MCA provides advice on the selection and use of management consultants and is the main source of data on the UK market.