With the latest government figures showing construction ranks among the worst sectors for insolvencies, new research has revealed that a lack of innovation could be contributing to this trend.

Innovation has been shown to play a huge role in increasing business profitability. In fact, government data shows that innovative businesses generate nearly two-thirds (60.5%) of their turnover as a direct result of introducing new products, services, or processes.

The lead generation experts at consultancy Sopro have analysed government data to reveal that construction ranks among the least innovative sectors in the UK.

They found that only slightly more than one quarter (27.7%) of construction businesses engage in innovation. The industry faces several obstacles that make innovation challenging, such as a reliance on manual labour and traditional techniques. 

The purchase of and training for the use of new equipment and technologies are limited in the sector, likely in part because they are expensive and time-consuming. 

The issue may even be compounded, for the merchanting sector, by the way it stradles several areas of activity also lagging behind when it come to innovation: the retail trade, transportation, and warehousing and storage sectors are also in the league table of least innovative industries.

The industries engaging in innovation the least:

Rank

Industry

Companies engaging in innovation

1

Real estate activities

23.2%

2

Accommodation and Food Service Activities

24.6%

3

Transportation (by land, water and air), warehousing and storage

27.2%

4

Construction

27.7%

5

Motion picture, video and tv programme production/programming & broadcasting

29.7%

6

Retail trade, except of motor vehicles and motorcycles

30.1%

7

Post and courier activities

33.1%

8

Mining and Quarrying

34.3%

9

Electricity, gas & water supply, waste management

36.2%

10

Financial and Insurance Activities

37.3%

Rob Harlow, Chief Innovation Officer at Sopro, commented on the impact of innovation in business and offers his tips: He said: “Innovation is essential to long-term success in any industry, offering significant improvements to problem-solving, service-offering, and overall business performance.

“Openness to implementing new tactics and processes allows companies to adapt to market changes quickly, capitalise on emerging trends, and gain a crucial competitive edge. 

“This can be through creating a unique product or service that will attract more customers or by carving a new niche in your industry to meet unfulfilled customer needs. You can do this by collaborating with your customers to collect feedback and monitoring industry trends to inform your innovations. 

“Alternatively, innovation can take the form of changing the way you engage potential new customers and generate business.

“For example, breaking out of your old marketing habits and implementing a multi-channel approach to prospecting, as well as sophisticated lead generation and nurturing strategies, can help scale your business. 

“While adjusting to new ways of operating might be difficult, it's worth remembering that one of the biggest reasons for losing deals is choosing to stick with the status quo. Meanwhile, embracing innovation can drive your business forward and put you at the forefront of your sector.”