Mid-market businesses have always relied on investment in innovation as one way to ensure they remain competitive. But in recent years we have seen innovation move higher up the board agenda as companies compete in ever-more global markets.
As part of its Central South Mid Market focus, BDO LLP in Southampton has identified 20 companies that highlight the breadth of innovation in the region, including six from Southampton and the New Forest: RTL Materials Ltd in Lymington, Universe Group plc, SPI Lasers UK Ltd, Green Marine Ltd, I20 Water and Ventilating Equipment Supply Holdings Ltd.
James Tetley, tax director at BDO LLP in Southampton explains: “The term ‘innovation’ can encompass many different things. In order to identify these 20 companies we have analysed the mid market population with turnover between £10m-300m and consulted with other professionals in banking, law and intellectual property. We believe these companies truly demonstrate the breadth of innovation in the Central South.
“While it is easy to focus on the ‘products’ aspect of innovation, it is important also to recognise the process innovation. Process changes that may appear from the outside to be a relatively simple improvement, development or adaptation can result in a genuinely innovative result. This equally applies to the use of new, environmentally-friendly technologies to enable production processes to be more efficient.”
In recent years, the Government has given clear signals that it intends to make the UK an ‘Innovation Nation’, a point which has been reinforced through Research and Development Tax Credits and more recently with the Patent Box regime.
BDO’s latest study within the mid-market bracket indicates that investment in R&D is essential. Tetley continues, “When companies can potentially recover £33 for every £100 spent on research and development through the tax credit regime, and then halve their future tax rate through exploitation of a patent, in many respects investing in innovation is a highly cost-efficient way to achieve strong sustainable growth.”
Yet R&D Tax Credits are not the only driver for these innovative businesses. Paul Mason, managing director of Rimor Ltd, comments: “While we monitor industry developments and continue to invest in the latest manufacturing plant and systems, it’s the process innovation, proven skills and engineering knowledge of our workforce that underpins our steadily growing order-book.”
