Innovation is still a key driver of success but the recession has meant it has become less important to UK businesses, says Britain’s business leaders.

According to research by Allianz Insurance, 83% of company leaders agree that innovation helps achieve higher profits, engage employees, stand out from competitors and deliver new growth.

However, there are signs that the challenging economic climate has forced businesses to refocus their attention on other areas, with nearly one in four (23%) reporting that the double-dip recession has pushed their innovation programmes down their list of priorities.

The downward trend is set to continue, with 26% stating it will become less important over the next year, 31% over the next five years and 33% over the next 10 years. Business leaders feel that barriers to innovation within their businesses are: a lack of money (27%), a focus on profits (26%) and a focus on other business areas (18%).

The research conducted with 500 UK company leaders found that many recognise that innovation makes a positive contribution to their organisation – 72% of business leaders acknowledge that their business is innovative to some extent.

The research also gives insight into what innovation is being used for in British businesses: 

• All aspects of the business (44%) 

• Product development (24%) 

• Employee engagement (21%) 

• Employee development (19%) 

• Creativity (14%)