What does the future of R&D investment look like?
It’s a phrase we hear all the time, but for those of us actually in the game, ‘increased R&D investment’ needs genuine policy and financial support, together with a clear understanding of the international competitive landscape.
Why is this important?
We’d all like to be global leaders, delivering world-beating science and innovation that can be commercially exploited to make the UK a research-rich economy. We would attract the brightest minds from around the world and contribute to a more stable and sustainable future for the country and beyond. Just as importantly, investment in research and development across the UK will create new businesses and new jobs, helping to support communities and increase skills.
We would also be able to drive economic growth across all our regions, something that needs to happen intelligently alongside the Government’s ‘levelling up’ plans, and a topic that we’ll tackle in more detail in next week’s blog.
According to the National Centre for Universities and Business (NCUB), there’s a lot of work to do if we are to reach the UK Government’s goal of total UK R&D spending rising to 2.4% of GDP by 2027, and 3% in the longer term. In its submission to the 2021 Spending Review, The NCUB says that the private sector currently invests around £25bn in research and development per year. It estimates that they will need to spend an additional £17bn in 2027 to reach the Government’s target. This requires an average per-year increase of £1.95 billion – considerably more than the current average increase of £0.9bn.
The NCUB’s five steps to better R&D investment
The NCUB makes a number of recommendations to encourage government to recognise and make the most of the UK’s potential to lead research and development in a number of areas, including medical, energy and technology innovation.
I strongly support these recommendations and I am looking forward to hearing the Chancellor’s plans when he presents the results of the 2021 Spending Review on October 27th.
- Enable the UK to act as a competitor in the global market for R&D investment to retain existing business investment and attract higher levels of globally mobile investment.
- Secure a global advantage in promising technologies by targeting fiscal and funding measures towards areas where the UK can become a world-leader by optimising investment and regulatory frameworks for firms in the UK.
- Pump prime the next generation of UK-led breakthrough technology options through investment in fundamental science by ensuring genuine and sizeable uplifts in public funding and wider incentives year-on-year.
- To remain globally competitive, it is critical to benchmark the climate for business investment in R&D in the UK against countries with higher levels of investment.
- Equip educational institutions with the certainty of funding, labour market intelligence and supportive policies that they need to deliver the highly skilled and adaptable workforce demanded by a research-intensive economy.
I have put a link to the NCUB’s report in the comments below. I’d also be really interested in how you see R&D investment increasing between now and 2027 in the UK in general and your organisation in particular, so do leave your thoughts in the comments.