BY SHARON TODD, CEO, SCI
Our industry is seeing significant change. The pressures of delivering net zero and the drive for sustainability have once again spotlighted science-based innovation as a key driver for future growth and value. Whilst many CEOs are reassessing their innovation portfolios and capabilities, countries are also assessing how best to capture future investments as these innovations scale.
Building on their national assets, many countries have successful industrial strategies driven by government backed incentive programmes. Whilst the US is busy building new supply chains based on a strong energy base, the UK and Europe are focusing on their science base. The snap general election announcement, that the UK will hold its election on 4 July, has brought the lack of industrial strategy in the UK into sharp focus.
‘Why are we not more like Singapore?’
This was the question referenced by former UK Industry Secretary Vince Cable, giving evidence earlier in 2024 at the Business and Trade Committee session on Industrial Policy. It is a question that is especially pertinent in the wake of the announcement in May 2024 that UK headquartered AstraZeneca is investing $1.5bn in a greenfield site in Singapore for the production of antibody drug conjugates (ADC). A decision motivated not only by the island state’s reputation for manufacturing excellence but also for reasons of political and economic stability.
But is it wise to compare the UK to Singapore? ‘Industrial strategy was a core part of Singapore’s development,’ Cable continued in his address. ‘They have sectoral approaches based on bioscience and quantum computing. They understand, as we do, that modern value-added activities are not just manufacturing; they are services, so they have creative industries and design programmes. This whole idea of government-private sector cooperation and planning – not state direction, but certainly working very closely together and trying to adopt a long-term approach is embedded in their system, as it is in many others.’
‘Our challenge in the UK,’ Cable concluded, ‘is to look at best practice and add that to our own experience.’
SCI’s Manifesto, launched mid-2023, calls for a UK industrial strategy, that would see more of these types of investments landing in the UK. Investments that will build on the UK’s excellent science and skill base, and its strong industrial heritage. But without clarity or a long-term approach by government these ‘once in a generation’ investments will bypass the UK. And there is other cause for concern. During the first quarter of 2024, the UK’s Office of National Statistics released the most recent business enterprise research and development (BERD) data for the UK in 2022. The data indicate that expenditure on R&D performed by UK businesses was £49.9bn in 2022. While the figure represents an increase in cash terms on the previous year, high inflation means business R&D investment in real terms has broadly stagnated since 2018, according to CaSE (Campaign for Science and Engineering).
Commenting on the data, CaSE notes: ‘This is concerning when approximately two thirds of R&D in the UK is carried out by businesses and is critical to meeting ambitions of a more research-intensive UK.’
This comment chimes with thoughts I shared with the Business and Trade Committee for the April 2024 hearing on Industrial Strategy. Whilst the UK performs well launching new businesses, we are failing to scale and grow them through to stockmarket listing. There are many data points around the de-industrialisation of science-based industry in the UK; the fact is the UK is falling behind. Scaling of businesses, along with securing larger scale investments are crucial elements of the SCI’s Manifesto.
The UK has many assets that should make the country attractive for investors. However, much more needs to be done to convert the science into valuable products and businesses that can actually create value for society.
With campaigning ahead of the UK General Election now in full swing, at SCI we are hopeful that our campaigning and representations to the UK’s policymakers, along with work by a host of trade bodies representing the UK science sector, will set the stage for a new era of economic success in the UK.
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