The founder and chairman of a purpose-driven group of B Corp-accredited companies has slammed Innovate UK’s decision to put its Smart Grant scheme on hold.
Innovate UK temporarily halted its £25m Smart Grants programme in January amid a major review.
The decision was made after the programme was oversubscribed, with successful application rates at around one in 10.
It is rumoured that no there will be no further grants awarded until the summer, when a successful revamp is set to be announced.
Gusto Group’s Steff Wright says the decision could be fatal for many small businesses which ‘aren’t operating on huge margins as it is’.
The entrepreneur, who left school at 16 to pursue a career as a DJ, has also recently been appointed Deputy Lieutenant of Nottinghamshire.
“The news that Innovate UK has put its Smart Grant scheme on hold for small businesses because ‘too many SMEs applied’ demonstrates the sheer number of businesses that are chomping at the bit to innovate,” he told BusinessCloud.
“If we want to turbo charge the economy and to have any hope in reaching net zero, we should be pulling out all of the stops to encourage and incentivise those businesses who are willing to innovate and push boundaries.”
Wright continued: “With pressures on businesses steadily increasing, those who might have been toying with a new project or scheme are now likely to put anything additional on the backburner as they are instead forced to strategise about how they will retain staff and cope with rises in National Insurance employer contributions.
“When it comes to developing new solutions, and sustainable offerings in particular, businesses are often held back by the continual balancing act of profitability.
“The reality is that businesses need to make decisions that move them closer to their end goal and anything that diverts from that, frequently comes as a secondary priority.
“Ultimately, innovation needs to be made commercially viable in order to make it accessible to the whole business community, not just those large enough to afford it.”
Wright is a fierce advocate of the need for businesses – of all shapes and sizes – to escalate processes that will facilitate a zero-carbon economy.
This is another reason as to why he is disappointed with the decision.
He said: “Many small businesses aren’t operating on huge margins as it is, and without additional funding those which might have been willing to cut into these margins previously in order to create a more environmentally conscious product – will no longer be able to.
“As a result, we are going to end up with an economy full of stagnant businesses unable to look beyond their own horizons and capitalise on opportunities to explore lower carbon solutions or more efficient ways of working, because they are instead preoccupied on keeping their heads above water.
“Without any indication as to when the scheme may restart, replacing Smart Grants or supplementing it with a new grant scheme needs to be a priority.”
Speaking on his own experience with the application process, he explained: “Rototek – the rotational moulding arm of our business – went through the time intensive Smart Grant application process several times and unfortunately, we weren’t successful.
“In our case, we found another way to fund the project, but it has slowed us down and could quite easily have made us reconsider the investment risk.”