Investing in innovation: How does the UK measure up?

Reports like the Global Innovation Index (GII) consistently rank the UK in the top tier of global innovators. Yet despite this, there remains a surprising lack of awareness about the UK’s innovation strengths — regionally, nationally, and internationally. So, how does the UK really measure up? 

Where the UK stands today

When the GII was first published in 2011, the UK was placed 10th. By 2020, the UK had climbed to 4th and maintained that position until 2024, when it dropped slightly to 5th out of 132 economies. Only Singapore, the United States, Sweden, and Switzerland rank higher. 

Ranking innovation is complex. The GII uses around 80 indicators, grouped into two categories: 

• Innovation Inputs – Elements that support innovation, such as R&D and education expenditure, the number of STEM graduates, and finance available to startups. 
• Innovation Outputs – Tangible results like patents, high-tech exports, startup valuations, and intellectual property.

Although the UK ranks 10th for inputs, it places 3rd for outputs — suggesting we deliver high innovation impact relative to investment. 

Bridging the budget gap

When it comes to innovation, China and the US dominate – but this is mainly because of the sheer size of both countries’ populations and markets. Case in point: China’s 14th Five-Year Plan will reportedly invest $6 trillion (about £4.75 trillion) into climate change-focused, digital economy innovation. The People’s Bank of China has also established an innovation fund of 500 billion yuan (roughly £2.5 billion). The US spent about $190 billion (roughly $150 billion) on federal research and development in 2023. Those numbers dwarf what is available in a far smaller country like the UK. 

The US ranks two places above the UK at third in the 2023 GII report, but China ranks 11th. This suggests that size and economic might does not necessarily mean innovation power. In fact, when adjusted per capita, the UK produces 57% more academic publications than the US and six times more than China. That’s also borne out by the small nation of Switzerland, which has ranked at the top of the GII for 14 consecutive years. . 

And while R&D investment had been on the decline, according the UK’s 2023 Innovation Strategy, the UK government committed a ​“record £20.4 billion” to R&D in its 2024 Autumn budget to ​“position the UK as a leader in science and innovation. That’s certainly not to be sniffed at and, given the UK’s innovation impact, we make it go a long way. That’s certainly not to be sniffed at and, given the UK’s innovation impact, we make it go a long way. 

The Government’s budget also pointed out just how remarkable — and vital for economic growth – our innovation ecosystem is. For example, did you know that the UK is the birthplace of more than 100 ​‘unicorns’ – innovative tech companies valued at $1 billion or more? Only China and the US have also produced more than 100. That is worth shouting about. 

Growing areas of UK innovation

There are several areas of rapid innovation growth in the UK. Artificial Intelligence (AI) is one of them, with a 600% increase in AI companies over the last decade and a market expected to grow to more than £800 billion by 2035. The 2023 global AI Readiness Index ranked the UK 3rd globally and first in Western Europe. 

Batteries are a cornerstone of the green transformation, both for the automotive and energy industries. The UK is a leader in this space and, according to government analysis, currently ranks 3rd globally for battery research and engineering. That’s no surprise to us at CPI, given our involvement with a number of innovative new battery technologies.

The UK also ranks highly – 3rd overall – for science and technology, but lags behind in other aspects of healthcare innovation, such as the adoption of electronic health records (EHRs) and health IT. With innovations from British companies such as KnitRegen’s portable stroke therapy, FloKi Health’s printable electronic tags to track hospital equipment and many more that will transform healthcare and medicine, this too could be about to change. 

We have a lot to be proud about when it comes to UK innovation, and we should be more inclined to shout about it from the rooftops. 

At CPI, we are the ideal partner to help bring your innovation project to life, and address some of the common challenges noted in the UK Innovation Strategy. These can include expertise to ease the difficult process of commercialising innovations, low rates of technology adoption, and navigating a regulatory system that favours established businesses over innovative new ones.