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Securing the UK’s R&D sector

08/05/17 Jordan Wood Contract Consultant - R&D / Engineering

 

Britain must secure its economy by ramping up spending on Research and Development (R&D) or risk being left behind in the global race to deliver game-changing innovations in areas such as space tourism and robotics, the country’s leading business group has said.

The CBI have launched a campaign to urge the government to adopt an ambitious new target for R&D spending of 3% of GDP, compared with the current level of 1.7% (Guardian, 2017).

Overview of UK R&D sector

Research and development (R&D) continued to grow, expanding by £1.2 billion to £31.6 billion in 2015, an increase of 4%.
Most of this year’s growth came from the business sector, which increased by £1.1 billion to £20.9 billion, an increase of 5%.
R&D over the long-term has grown, rising from £20.1 billion in 1990 (in constant prices, adjusted to remove the effects of inflation) to £31.6 billion in 2015, an increase of 58%.

The largest R&D expenditure in the UK is in the following sectors:

Pharmaceuticals (£4.2 billion)
Motor vehicles and parts (£2.7 billion)
Computer programming and information service activities (£2.4 billion)
Aerospace (£1.7 billion)
Miscellaneous business activities (£1.1 billion)
Machinery and equipment (£1.0 billion)

(ONS – UK Gross domestic expenditure on Research and Development)

Adopting a target for R&D spending would send an important signal to foreign investors and academics that the UK can remain a hub for innovation and scientific collaboration in a post-Brexit world. Despite Government plans for a new industrial strategy and more spending on innovation, the UK’s position as ‘World Leaders in Science and Innovation’ is at risk.

Much of what the UK needs to deliver as a world-class innovation ecosystem is already in place. The UK has first-rate universities, cutting-edge businesses and attracts talent from across the globe. However, spending on R&D has stagnated at just 1.7% of GDP, with both public and private sectors under-investing, says the report.

It speaks of a growing challenge from Asian economies, notably China, which increased its share of global R&D spending from 2.5% in 1996 to 19.6% in 2013. China also outranked the UK when measuring its R&D spending as a percentage of GDP, which stood at 2.0% in 2014.

The CBI has not set a date for its 3% target to be reached, but believes it is achievable by 2025.

Jordan Wood, Contract R&D / Engineering Consultant at Redline Group discusses further: “Now is the time for the UK to up its game in where we stand with innovation. The UK has great opportunities in terms of new industrial strategy in engineering and manufacturing and to boost growth and jobs in both these sectors.

Investment in innovation is seen as central to solving many of the critical world problems such as accelerated climate change and healthcare challenges. One of the issues is that other countries are spending at least 3% on R&D and it is recognised internationally that this level of spend is needed to have a significant impact on long term economic outcomes. Too little spend and the UK might further lag behind other countries resulting in a negative impact on businesses and the economy as a whole.”

What are the next steps?

“It’s suggested that Government needs to play a strong role in publicising the long-term 3% target, helping businesses engage strategically and working in partnership with the devolved UK nations.
Businesses need to have the right cultures, leaders and access to skilled staff. Their ability to access skilled staff feeds back into the education and schools agenda – given educators have a key role in developing our future innovators, scientists and technologists.”

Jordan continues, “Innovation needs be a key source of competitive advantage for the UK once we leave the EU. A long-term strategy to bolster total spend on R&D would send an important signal about the stability and sustainability of our science and innovation ecosystem supporting private sector R&D investment, R&D jobs, and economic growth and the UK will remain a key player in science and innovation.”