As someone that meets a lot of people running innovative companies, which gives me some knowledge of the challenges they face – I was delighted to see that the Confederation of British Industry (CBI) has published a report which calls for UK Research & Development (R&D) spend to be raised to 3% of GDP. Like any report of this nature it’s not a short read, so here is a summary of it. You can follow the link at the bottom to download the full report.
“Gene editing, space tourism, self-driving vehicles, robotic limbs, floating farms, London to Sydney in four hours. Game-changing innovations like these will shape the course of the next decade. Many will improve lives across the globe.”
The report looks at:
- the case for more investment;
- why and how we need to build the UK’s capacity to commercialise Ideas;
- the challenges in our innovation ecosystem that need to be addressed; and
- the next steps for business and government.
“…the House of Commons Science and Technology Committee, and the Business, Energy and Industrial Strategy Committee, have both argued for a long-term plan to increase total R&D investment in the UK, stating support for the 3% benchmark.”
One of the issues is that other countries are spending at least 3% on R&D and it is recognised internationally that that level of spend is needed to have a significant impact on long term economic outcomes. Too little spend and the UK might increasingly lag behind other countries resulting in a negative impact on businesses and the economy as a whole.
“…our spending on R&D has stagnated at just 1.7% of GDP, with both public and private sectors under-investing.”
The point is made that the future of UK innovation cannot be looked at without considering the possible risks posed by Brexit:
“… the UK’s exit from the EU could leave our businesses and universities unable to access the funding and collaborative networks of which they have been a leading recipient and contributor, damaging our influence overseas.”
And the case is made that:
- innovation and the innovation ecosystem boost productivity, bring inward investment;
- innovative companies are more likely to export;
- firms introducing new products grow jobs and turnover at a higher percentage rate than non-innovating firms;
- we already have leading universities and research institutions and the UK is home to some world-leading innovative sectors.
“These include high-end services, chemicals, life sciences, aerospace, creative industries and automotive.”
But we are not so good at commercialising research and the complexity of the innovation landscape can mean it’s hard and costly to access what’s needed when it’s needed, plus less funding is funnelled through innovation funding bodies.
“Innovate UK’s budget represents 0.03% of the UK’s GDP, relative to 0.07% and 0.18% of respective GDP funnelled through German and Finnish innovation bodies.”
What are the next steps?
Public funding is seen as vital as it helps bring in private sector investment, an example being:
“The Biomedical Catalyst, a partnership between the Medical Research Council and Innovate UK to stimulate research in the life sciences… As well as attracting industry-matched funding from businesses participating in its competitions and grants schemes it has also crowded-in follow-on private sector investment, to the tune of four times the original government funding provided.”
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.
Collaboration between public, private and educational organisations is also seen as critical to success in achieving optimum economic and social benefits.
“Innovation should be a key source of competitive advantage for the country once the UK leaves the EU. A long-term strategy to bolster total spend on R&D to 3% of GDP would send an important signal about the stability and sustainability of our science and innovation ecosystem in a post-Brexit world, supporting private sector R&D investment, jobs, and economic growth. Together, government and industry must take responsibility. Both have a role to play, and the government’s industrial strategy presents a unique opportunity to ensure the UK remains a key player in science and innovation.”
Download the full CBI report here: NOW IS THE TIME TO INNOVATE
For a confidential, no obligation chat about claiming R&D Tax Credits to help support your business innovation investment you can speak to Linda Eziquiel at email@example.com or you can call her on 0771 9439 229