The UK innovation system has many strengths. For example, it is ranked 4th in the Global Innovation Index; it has an unrivalled status in research impact amongst the G7. It is a partner of choice for international collaboration. However, the UK faces significant competition and challenges. UK R&D investment is 1.7% of GDP, while the average spending in OECD countries is 2.4%. The proportion of innovation active businesses in the UK has decreased from 49% in 2014-2016 to 38% in 2016-2018. To compete with other countries, the UK needs to increase its investment in research and development and encourage more businesses to be active in innovation.