Innovation in the UK Retail Sector - Nesta

Recommendation 1:
Innovation in the UK Retail Sector
Improve the effectiveness of innovation-related support activity within Government.
This will require:
• A more systematic approach to co-ordinating information & expertise in Government & NDPBs
which mimimises bureaucracy and improves access. The provision of a ‘one stop shop’ hosting
information on initiatives, support and services available to the sector, especially to SMEs.
• A better mechanism for identification, prioritising and channelling of commercial, innovation-related
initiatives and research to firms (a ‘single voice’).
• Encouragement of longer term horizon scanning that is more relevant to retailing: facilitating the
showcasing of new ideas with commercial potential and supporting projects ‘on the margin’.
Government should identify an appropriate mechanism or intermediary to channel innovation-relevant
initiatives simply and efficiently to the correct individuals within the sector and to prioritise those of most
commercial relevance to the sector. Evidence that the sector was responding with purpose and conviction
to any integrating efforts by the Government would be an important demonstration of commitment.
Recommendation 2:
Increase the awareness and take-up of R&D tax credits by the retail sector.
This will require:
• Identifying and prioritising the kinds of activities undertaken by retailers and by suppliers on their
behalf which might qualify for support under both large business and SME schemes.
• Improving awareness of the schemes and of these priorities amongst retailers, particularly retail SMEs
outside London and the South-East.
• Improving the speed and transparency of the application process to reduce uncertainty.
• Investigating the extent to which, without diluting the existing mechanisms, the R&D tax credit
scheme might be both deepened and broadened to benefit service innovation
Government should work with retailers and key third party suppliers to clarify the kinds of activities
undertaken by and for retailers which would qualify for tax credits and to examine ways in which the
application and inspection process for tax relief on such activities might be further streamlined.
Recommendation 3:
Promote innovation by retailers in sustainability.
Eight specific measures which might act as stimuli for innovation in sustainability have been identified by
the sector:
Provision of support mechanisms
• VAT reductions to stimulate green product innovation,
• Business rate relief on energy efficient buildings, and
• Encourage development of shared waste facilities by SMEs.
Reduction of barriers
• Faster and easier planning regimes for sustainable technologies relevant to retailing
• Fostering a standards-based framework to manage sustainability and reduce uncertainty and risk
Page 6