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Many accountants are sitting on untapped sources of value within their existing client portfolios without realising it.
When people think about innovation, they often picture technology start-ups, research laboratories, software developers or businesses filing patents. In reality, some of the most commercially significant innovation taking place in the UK today is happening inside established SMEs that would never describe themselves as innovative businesses.
A precision engineering company redesigning a manufacturing process. A food manufacturer overcoming shelf-life limitations. A software business solving scalability challenges that existing technologies cannot adequately address. These businesses rarely see themselves as innovators – they are simply trying to win contracts, improve margins, reduce waste, increase productivity and remain competitive.
Innovation has become a commercial necessity rather than a strategic label. The challenge is that much of this activity remains invisible to advisers because it rarely presents itself as innovation. As a result, opportunities linked to investment, growth, operational improvement and innovation incentives often go unrecognised.
Why innovation is often missed
One of the biggest misconceptions surrounding innovation is that it has to look dramatic.
Many businesses and advisers still associate innovation with significant scientific breakthroughs, easily patented inventions of cutting-edge technology development. As a result, they often overlook the type of technical problem-solving that occurs every day within traditional sectors.
In reality, much of the UK’s innovation economy is built on businesses attempting to improve efficiency, increase throughput, reduce waste, improve product performance or overcome technical limitations that directly affect commercial performance.
Recently, I worked with a manufacturer that spent more than a year redesigning a production process to eliminate recurring quality failures. Internally, it was described simply as “fixing a production problem”. Neither the business nor its advisers initially viewed the work as innovation or recognised the value being created.
That is far more common than many people realise. Ask an engineer whether they are carrying out R&D and many will say no. Ask them whether they spent six months trying to solve a problem that nobody knew how to solve at the outset and the answer is often yes.
Internally, these projects are rarely labelled as innovation. They are simply viewed as solving problems and keeping the business moving forward. More often than not, competent professionals simply call it “firefighting”. They are focused on solving technical problems, overcoming constraints and delivering results rather than documenting innovation.
However within that firefighting is often where future value is being created. The innovation itself matters, but so do the commercial outcomes it enables, from greater capacity and stronger margins to improved products and future growth.
The growing technical knowledge gap
The role of the accountant has evolved significantly. Clients increasingly expect advisers to help them understand how the business has performed, as well as where the future value is being created.
The difficulty is that many firms are not equipped to interrogate technical activity in depth.
A set of accounts can tell you that profitability is improved – it cannot explain the technical work that made that improvement possible. The challenge is not identifying expenditure, rather understanding the activity that sits behind it.
Many advisers know more about how their clients performed last year than how they are creating competitive advantage for the next five. Yet increasingly, that advantage is being built through technical problem-solving, process innovation and operational improvement.
Why specialist collaboration matters
No firm can reasonably be expected to possess deep expertise across every area of engineering, manufacturing, software development, construction, food science or technology. Nor should it.
The value of a trusted adviser is not measured by knowing everything, but by understanding where specialist expertise can help clients achieve better outcomes.
Where technical innovation is concerned, partnering with right specialists can help advisers move beyond compliance conversations and gain a deeper understanding of how value is being created within the client’s business. This benefits everyone involved.
Clients gain access to expertise that helps them better understand the value being created within their business, while advisers gain deeper insight into their clients’ operations and future growth opportunities.
Clients notice the difference – they can tell when an adviser understands how the business actually operates and , more importantly, they can tell when they do not.
The bigger opportunity
Innovation influences investment decisions, operational efficiency, product strategy, competitiveness and long-term enterprise value.
Much of the UK’s innovation economy sits inside established SMEs solving difficult operational and engineering problems every day. The businesses creating the most value over the next decade may be those quietly building technical advantages their competitors struggle to replicate.
The strongest client relationships are often built by helping businesses identify opportunities, overcome challenges and make better-informed decisions. When advisers help clients uncover sources of value that may otherwise have been missed, they reinforce their position as trusted strategic partners rather than purely compliance providers.
The firms that will stand out in the years ahead are likely to be those that take the time to understand how value is being created within their clients’ businesses and build the right network of expertise around them to support it.
The next significant opportunity for many firms may not be finding new clients, but understanding existing clients more deeply. Much of the UK’s innovation economy remains hidden inside established SMEs solving technical, operational and engineering challenges every day. The advisers who learn how to recognise that innovation will be better positioned to help clients unlock investment, improve competitiveness and support long-term growth.
