Businesses are investing again after two years of cost-cutting

“Our pipeline for work in the private sector is twice what it was this time last year,” said Frazer Bennett, referring to the demand for his team’s innovation expertise.

PA Consulting supports the innovation efforts of large companies such as Unilever and Diageo in consumer products and Pfizer and Sanofi in life sciences, as well as many smaller, venture capital-backed companies.

“[Customers] are coming back to us and saying we really do need some help now, not least because we have just spent the past 24 months making ourselves leaner and now we need to respond quickly to an uptick in confidence and the market,” said Bennett.

His comments come as the prime minister is due to give a speech on Thursday where he will call for a more "agile and active" state and tell ministers to assess “processes and regulations which play no part” in delivering on the government’s priorities.

Sir Keir Starmer’s comments follow those of Peter Kyle, the science secretary, who said on Monday that the government was prioritising cutting unnecessary regulations and red tape holding back innovation.

“There is no route to long-term growth, no solution to our productivity problem, without innovation,” Kyle told a conference organised by trade body techUK.

Bennett agreed. “Innovation is about delivering growth through exploiting discoveries in science, exploiting creativity in design and exploiting innovation in engineering and dragging these things through into a market to create value,” he said.

However, Bennett said that regulation was not a hindrance to innovation, provided the way to achieve the outcome required by the regulation was not strictly defined.

“Regulation is as much a catalyst for innovation as it is a constraint. It is about ensuring that the stringency of that regulation is not so high that it becomes a barrier,” he said. “It is the what and the how: if the what of the regulation is very clear that is a positive thing; if the how is extremely laid out, that is not a good thing for innovation. If there is only one way to address [the goal of the regulation] then that is not a competitive advantage.”

Bennett said large companies were looking for new ways to provide both digital and physical services and products. “We continue to see an ambition to embrace new materials that are more sustainable,” he said. Companies were also exploring how they develop digital relationships with customers, rather than simply transacting with them.

He said there would be a “wrestle for talent” as companies re-prioritised innovation, but added that having some “constraint” in the process of innovating was helpful. “If you just keep funding stuff you don’t necessarily get a good outcome. Creativity loves constraint and it is an important constituent in driving innovation.”

This article was first published in The Times.