Regional development agencies' innovation policies are "too narrowly focused on science and academia rather than companies doing things better in new ways", according to a report by Salford University.
The report, The Ideas Business: The Real Innovation Nation, published jointly by the British Chambers of Commerce and Salford's centre for sustainable urban and regional futures, claims to map business innovation activity in the regions in relation to England's nine regional development agencies.
The combined RDAs have a £2.2bn annual budget to spend on a small number of priorities including "encouraging innovation" and "supporting enterprise". A snapshot business survey for the report however, found that while 74% of business respondents already invest in research and development, only a third were aware of the current regional support available for innovation.
The report found that while a great deal of activity is undoubtedly taking place and a lot of public money being spent the activity is often too academic and duplicated by the private sector, creating unnecessary waste and inefficiency.
Government needs to remove the barriers that restrict a broader, more entrepreneurial approach to regional innovation policy, the report's authors said.
David Frost, director general of the BCC, said: "Maintaining a culture of innovation amongst UK businesses is essential to the future prosperity of our national and regional economies.
"RDAs have significant budgets and it is important that in facilitating innovation, they join-up support with what is really happening in the private sector in their regions. There is a great deal of work to be done here if the goal of embedding a nationwide culture of innovation can be met, and the expertise of the entire business community must be brought to bear in meeting this."
Steven Broomhead, North West Development Agency chief executive, said: "The NWDA has a key role to develop and drive enterprise and innovation activity throughout the Northwest as a key driver of regional economic growth. We recognise that in order to promote innovation, we must invest in a wide range of activity, including developing science, research and knowledge driven activities, as well as providing the support and services that will help regional businesses grow and develop.
"As a business led organisation, the agency engages and works in partnership with a large number of regional stakeholders, including the Chambers of Commerce, to help us understand and address the needs of local businesses. All our business support activity is subject to rigorous appraisal and evaluation, to ensure that it does not duplicate existing projects.
"The NWDA is also committed to the Government's Business Support Simplification Programme, which will result in a simple and consistent portfolio of business support, with Business Link Northwest as the primary access channel.
"SMEs play a significant role in developing the regional economy and are a key target for agency services and support. The NWDA invests around 14% of its budget on innovation and science through a wide range of projects, including the Knowledge to Innovate and Frameworks Northwest initiatives, which are being delivered to SMEs in the region to assist with their capacity to access and exploit innovation."