Many feel the government should do much more to support businesses.
According to new research, 42% of organisations in the UK consider that a lack of innovation is harming their business.
Around 42% expect to increase R&D spend while 32% said that they would cut their efforts despite knowing the consequences of what a lack of innovation could do.
The research, commissioned by Ness Software Engineering Services (SES), found that awareness regarding the Digital Economy is considerably low amongst business in the UK, with 57% of respondents stating that they don’t understand the concept.
The report also highlighted that the fear of failure made organisations more inconsistent to take risks, as 45% of respondents agreed that taking risks resulting in failure should not affect their careers, whereas 32% disagreed with this viewpoint.
However, around 40% claimed that they were fearful about failure and its effect on their career.
Around 44% of the respondents feel that the government should be playing an important role in supporting innovation and the Digital Economy by providing tax breaks or subsidies to UK enterprises.
Nearly 42% feel that innovation can be fuelled by foreign investment, and 34% feel that investment in universities could boost innovation. This contrasts sharply with 11% who felt that the government should not interfere at all.
Ness SES European operations senior vice president Pete Rogers said: "UK business leaders recognise that lack of innovation in digital products and services could be holding back their organisations, and the risks of not preparing for the Digital Economy far outweigh internal organisational challenges of determining the best way to approach it.
"Many companies are overcoming these challenges by engaging a knowledgeable partner, such as Ness SES, that can provide integrated user experience design, software product engineering, and data analytics services that minimise the risks of change and increase the business value of digital transformation and innovation."