Cambridge Industrial Innovation Policy (CIIP) recently published its UK Innovation Report 2026, with the aim of reviewing the UK’s innovation and industrial performance and comparing it with that of other countries.
First, the good news.
The UK is in the top 5 for scientific publications
The report notes that the UK is a leading global innovator, ranking fourth worldwide for scientific publications in 2022 and contributing to over half of global research output alongside China, the USA, and India.
The UK is in the top 10 for patent filings
The UK also places in the top 10 countries for patent applications in key technologies such as AI, semiconductors, and biotechnology. However, despite these strengths, the UK still lags well behind major innovation leaders like Japan, South Korea, China, and the USA in overall patent activity. Moreover, CIIP notes that the UK is in the top 10 for “critical technology” patent filings, which include quantum and telecommunications.
The UK is in the top 10 for R&D investment
The UK ranked sixth globally in R&D investment in 2023. UK investment accounted for 3.5% of world R&D spending, behind Japan (7%), Germany (5.8%), Korea (4.8%), China (28.1%) and the USA (29.7%).
Now, for the not-so-good news
Large firms dominate UK Patent Box relief
The UK Patent Box scheme offers a reduced 10% corporation tax rate on profits from patented products. CIIP analysis of Patent Box tax relief shows that large manufacturers dominate the commercialisation of patented innovations, with large firms claiming a massive 94% of all Patent Box relief in 2023-2024, and with manufacturing accounting for 42% of total claims. As might be expected, large companies file significantly more patent applications than SMEs and micro-sized firms. Nevertheless, it seems that smaller UK firms may be missing out.
High-tech export share has fallen
CIIP also notes that while UK research output has risen, high-tech export share has fallen, declining from 8.7% of total exports in 2007 to 6.4% in 2022.
Some high-potential R&D sectors are missing out
Also, while public UK investment in research and development was high in sectors such as the manufacture of basic metals, computer, electronic, and optical products, machinery and equipment, and air and spacecraft and related machinery, other sectors - including some with strong R&D potential and economic importance - such as the manufacture of food products, beverages, and tobacco, and motor vehicles and trailers, received less public investment than these sectors in other countries.
UK spin-outs aren't staying in the UK
Further, most UK spinouts that achieved exit through acquisition between 2012 and 2021 were acquired by non-UK firms, with only around one-third being acquired by UK-headquartered businesses. Since 2012, the majority of UK university spinouts’ IPOs have occurred overseas, mostly on the US NASDAQ. According to CIIP, this high mobility in spinouts, startups, and industrial R&D risks eroding UK value capture.
So how can we strengthen UK innovation by supporting UK companies to protect their intellectual property (IP) and maximize its value?
From my perspective as a patent attorney, I often encounter smaller businesses and sole traders who struggle to identify what IP they already have, and are therefore not in a good position to protect it in a cost-effective way, or to maximize potential financial benefits. A short call with a patent, design or trade mark attorney - usually offered at no charge by most firms of IP specialists, including Marks & Clerk - can really help to put things in perspective, and business owners usually come away from the call with a far better idea of what IP could be protected and how, and what the associated costs might be. M&C even has a dedicated start-up offering to help innovators, entrepreneurs and spin outs protect, enforce and maximise the value of their IP.
For larger companies who already have some IP, but are possibly over-spending on areas of low value while being under-protected in more valuable areas, a complete IP audit carried out by an IP firm can help to put things in order and produce a streamlined IP portfolio that is up-to-date and focused on what is commercially important. While many SMEs are familiar with IP, typically there may be no dedicated in-house IP manager, and management of the IP portfolio can fall to (for example) finance managers, or even CEOs, who are already busy and have little time to spend thinking about intellectual property.
In summary, help for UK companies is out there; an initial enquiry typically costs nothing, and may help significantly on your journey towards maximizing the value of your IP. M&C's sector groups include energy & environment, digital transformation, life sciences, agritech, medtech, chemistry, transport, entertainment & creative industries, food & drink, fashion & retail, defence, and aerospace & spacetech, and we can also assist with commercial IP and contracts, freedom to operate, due diligence, open source code, domain name disputes, anti-counterfeiting, plant variety rights and SEPs, so whatever you need is waiting for you here.
Head to marks-clerk.com to find an expert in your field, or choose from one of our 8 UK offices (Aberdeen, Birmingham, Cambridge, Edinburgh, Glasgow, London, Manchester and Oxford), and get your IP working for you.