Innovation - key indicators

Innovation is central to the aim of building a more productive North East, fostering a competitive and embedded business base and solving social social and economic challenges in the region and beyond.  The North East Strategic Economic Plan (SEP), which was agreed in 2014, set out the six key measures of success relating to innovation listed in bold below. The text and charts on this page show progress up to and including the latest statistical releases. 

Increase the percentage of businesses that are ‘innovation active’ by 2021

• About 34 per cent of businesses in the North East region were 'innovation active' in 2016-18, the latest period for which data is available 
• this is 19 percentage points lower than in 2012-14, when it was 53 per cent
• in England as a whole, the percentage of innovation active businesses had also decreased during this period, from 54 to 38 per cent
• the term 'innovation active' is defined in the footnote of the first chart on this page.

Increase R&D investment to 2.4% of GVA by 2027

• Total expenditure on research and development in the North East region was £780 million in 2018
• this was equivalent to just over 1.4 per cent of the region's GVA
• this percentage has increased from 2014, when it was just over 1.1 per cent of GVA but is still below the UK equivalent (1.9 per cent)

Reduce the gap by 50% in business expenditure on R&D against the UK average by 2021

• Business expenditure on research and development in the North East region was £411 million in 2019 
• this was equivalent to £1.87 million per 10,000 adults, a much lower rate than across the UK (£4.80 million per 10,000 adults)
• however, the North East rate had increased by 43 per cent since 2014, a larger percentage increase than nationally (up 26 per cent) 
• as a result, the gap between the North East and UK rate (expressed as a percentage of the latter) decreased from 66 to 61 per cent between 2014 and 2019.

Increase the percentage of businesses that are engaged in process innovation by 2021

• Just over 12 per cent of businesses in the North East region were process innovators in 2016-18
• this was lower than in 2012-14, when it was slightly less than 14 per cent, but higher than in 2014-16 
• nationally, the percentage of process innovators was similar in 2012-14 and 2016-18, at just under 13 per cent
• process innovators are engaged in the introduction of a new or significantly improved process.

Increase the percentage of businesses that are engaged in ‘wider innovation’ by 2021

• About 22 per cent of businesses in the North East region were wider innovators in 2016-18. 
• this was almost 23 percentage points lower than in 2012-14 and more than 7 percentage points lower than in 2014-16
• in the UK as a whole, the percentage of wider innovators had also decreased sharply during this period
• wider innovators are engaged in new and significantly improved forms of organisation, business structures or practices and marketing concepts or strategies.

Increase the share of UK government innovation expenditure per capita to the UK average by 2021

• The only recent estimates of Government R&D expenditure in the North East region are for 2015 and 2016 (£47 million in both years), This is due to disclosure issues with the data
• these estimates were both equivalent to £2.2 million per 100,000 adults, which was only just over half the UK rate
• in 2018, combined R&D expenditure by Government and private non-profit organisations in the North East region was £87 million. 
• this was equivalent to £4.0 million per 100,000 adults, about two thirds of the UK rate (£6.1 million per 100,000 adults)
• it was an increase of more than 300 per cent on the 2014 total, much higher than the percentage growth across the UK (14 per cent).