How COVID-19 Could Actually Boost the Economy
Believe it or not, there is a silver lining emerging from behind the dark clouds of COVID and the ‘year that stood still’.
That silver lining is innovation.
“The pandemic has triggered a surge of entrepreneurialism in the UK and highlighted the importance of business-led innovation, for both catalysing growth and building resilience.” – Innovate UK
According to research, the rate of innovation almost doubled last year, rising from 8% to 14%.
Why have companies turned to innovation in a time of crisis and what sort of innovative projects, products and processes have they created?
Let’s find out…
Why have companies turned to innovation during the pandemic?
“Crises always lead people to find new ways to do things, adopt new technologies and cast away old practices.” – Washington Post
COVID has forced people to change the way they live, work and socialize, possibly forever. But during the deep depths of lockdown, to survive, companies were obliged to think on their feet and change the way they operated and serviced their customers.
With COVID crisis funding and initiatives from the likes of Innovate UK, quick-thinking organisations were able to pivot and adapt to the crisis by repurposing physical locations, exploring new business models, and rapidly adopting disruptive technologies to find new ways to stay afloat.
What sort of innovative projects, products and processes has COVID inspired?
Lockdown saw the development and growth of many new and innovative services and products. Early research has indicated that over 80% of businesses developed a new product or service during the pandemic. 88% secured new customers or entered new markets and, unbelievably, 10% managed to break into overseas markets for the first time.
What type of innovations are we talking about?
Job hunting algorithms
Curtain Call created an online ‘talent booking’ marketplace with an algorithm that automatically connects creative and technical freelancers with work opportunities.
Quieter shopping time chatbots
Using real-time data and customer transaction numbers, Lidl developed a chatbot that allows customers to use WhatsApp to receive insights that let them know whether their store is likely to be quiet, average or busy.
PPE vending machines
Selecta, a vending machine company, developed and installed vending machines in several airports and train stations across Europe, to give travellers instant access to essential personal protective equipment, such as face masks and hand sanitizer, while they’re on-the-go.
The bars, pubs and clubs suffered a brutal hit during the pandemic. But Brewdog used out-the-box thinking to keep their heads above water. They started producing hand sanitiser, created virtual bars and the Brewdog Drive-Thru, and are even repurposing physical locations to create co-working space with Desk Dog.
What does the rise in innovation mean for the future?
“One of the major benefits of innovation is its contribution to economic growth.” - ECB
Innovation boosts productivity and enables businesses to produce more and more goods and services for the same amount of money. This increase in profitability allows these companies to pay their employees more. And, the more money employees have in their pockets, the more they can spend, making other business more profitable.
So, innovation is our ticket out of the recession brought on by COVID.
How to get financial support for innovative projects
Although investing in innovation is great for businesses, and therefore the economy, it is costly, and it doesn’t always go to plan.
That’s why the government introduced the R&D tax credit scheme back in 2000. The R&D tax credit scheme allows organisations to claim up to 33% of the costs they spend researching and developing their innovative projects.
There are two ways you can get help with making an R&D claim:
- Speak to an R&D tax specialist, like Myriad Associates
Myriad Associates have been filing R&D tax credit claims with HMRC for around a decade. With a right-first-time approach, a strong relationship with HMRC and a 100% success rate with all their R&D claims, contact them for advice and support here or give them a call on 0207 118 6045.
- Use a self-service tax claim portal, like Tax Cloud
As accountants, you’re probably already familiar with the tax claim process. So, a full-service support option like Myriad Associates might be overkill. If so, Tax Cloud might be for you. Tax Cloud is the UK’s first online R&D tax claim portal. Once you’ve signed up, all you do is log in and work through a set of steps to submit your R&D tax credit claim. Powered by the R&D tax credit team at Myriad Associates, you’ll be fully supported the whole way through the R&D tax claim process and your claim will be checked by the team before it gets submitted to HMRC. This means you’re guaranteed to get the full R&D tax entitlement for yours or your client’s innovative projects.