The National Centre for Universities and Business (NCUB) is calling on the UK Government to increase investment in R&D as data from the Office for National Statistics (ONS) indicates the total spend on R&D fell from 2.81% of GDP in 2021 to 2.77% in 2022. With the level of investment falling 0.11%, some £80 million less was spent on R&D in the UK during that period, the NCUB says.
The call comes as the NCUB releases a report which sets out the importance of Government funded R&D as it leads to ‘almost twice as much business investment as previously thought.’ The study: Unlocking Growth: The Impact of public R&D spending on private sector investment in the UK show that for every £1 spent by the Government on R&D, an additional £3.09 to £4.02 is then spent by businesses investing in R&D.
Rosalind Gill, Head of Policy and Engagement at the NCUB said “The UK falls behind G7 peers like the US, Japan and Germany. The power of investing in UK research simply cannot be underestimated and the UK must remain competitive to drive economic growth and prosperity.”
Drawing on insights from analysis commissioned by the UK Government’s Department for Business, Energy & Industrial Strategy in 2020 and carried out by Oxford Economics, the NCUB study indicates that a 1% increase in public R&D translates to a 0.18% to 0.33% increase in business R&D within the same fiscal year. In addition, 60% of the impact of public R&D spending on private R&D investment is realised in the first three years, reflecting a more pronounced impact in the short term.
The report notes that while in the short term, the UK shows relatively higher returns on public R&D investment compared to peers in the G7, the UK compares less favourably to G7 countries when it comes to achieving long-term sustained impact from public funding or private R&D investments.
The NCUB says their overall findings resonate with existing research which shows the positive influence of public R&D support on private R&D investment, highlighting the significance of strategic and timely investments in public R&D to foster sustained growth.
“Businesses are by far the largest investors in UK research, spending close to £50 billion annually – however levels of business R&D investment in the UK have dropped in recent months despite growing in other countries,” said Gill. “The Government must commit to long-term, globally competitive rates of public funding for research, as well as work with stakeholders […] to create a powerful and attractive environment to research, collaborate and innovate.”
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