Decades of missed UK R&D spending could damage future growth

Posted on 1 Dec 2014 by Callum Bentley

The Government must commit to a three per cent target of GDP of research and development (R&D) spending by 2020 to ensure the UK doesn’t lag behind international competitors, says the Business, Innovation and Skills (BIS) Select Committee in its Business-University Collaboration report published today.

The BIS Committee finds that more than 30 years of under-investment in R&D has left the UK trailing countries such as the USA, Germany and France in science and innovation spending, threatening the opportunities for economic growth offered by the research excellence of the UK’s world class university system.

Adrian Bailey, chair of the Business, Innovation and Skills (BIS) Committee, said: In 1979, the UK was one of the most research-intensive economies in the world. Now amongst advanced industrial economies, it is one of the least. If the UK is going to punch its weight in the global economy, and help our businesses succeed in international markets, the Government needs to bridge this structural gap in research and development (R&D) funding and commit to a 3 per cent target of GDP spent on R&D by 2020.

“To ensure the economic potential of our science base isn’t throttled, we call on the Government to protect the science budget in the next Spending Review and to use the forthcoming Science and Innovation Strategy to set out its plans to build capacity in our innovation system and articulate an ambitious vision for this sector.”

Report Committee Membership 

  • Mr Adrian Bailey MP (Lab) (West Bromwich West)
  • Mr William Bain MP (Lab) (Glasgow North East)
  • Mr Brian Binley MP (Con) (Northampton South)
  • Paul Blomfield MP (Lab) (Sheffield Central)
  • Katy Clark MP (Lab) (North Ayrshire and Arran)
  • Mike Crockart MP (Lib Dem) (Edinburgh West)
  • Caroline Dinenage MP (Con) (Gosport)
  • Rebecca Harris MP (Con) (Castle Point)
  • Ann McKechin MP (Lab) (Glasgow North)
  • Mr Robin Walker MP (Con) (Worcester)
  • Nadhim Zahawi MP (Con) (Stratford upon Avon)

The Committee visited Catapult centres at Milton Keynes and Harwell, Oxford, as part of its inquiry and its report finds the Catapult network has played a valuable role in harnessing the commercial benefits of science and innovation research. The Committee calls on the Government to back the recommendations of the recent Hauser Catapult review and expand the Catapult Network from the seven current centres to 20 by 2020 and 30 by 2030 and increase funding to Innovate UK.

The Committee heard encouraging news about the developing links between businesses and universities, offering businesses access to cutting-edge research, high-tech infrastructure and highly skilled people, while giving universities an opportunity to develop their applied research and demonstrate the impact of their work. However, the Committee finds that more can be done to improve communication between businesses and universities and calls for a co-ordinated approach to ensure the range of existing initiatives are utilised effectively.

Adrian Bailey MP, Chair, said: “We have a world-class university research and science base in the UK but not enough is being done to harness the potential economic benefits of this expertise. Other countries, such as Germany, seem to get more value from their scientific activity than the UK. The Government needs to do more to bring businesses and universities together to realise the benefits of the cutting-edge research taking place across the country”.

The Committee recommends that the Government establish a respected and impartial way to measure and evaluate the success of its initiatives to increase R&D activity, such as by reintroduction of the R&D scoreboard. These measures, alongside an ambitious long-term vision for the innovation system, should be built into the forthcoming Science and Innovation strategy.

Innovate UK Chief Executive, Iain Gray

Welcoming the report, Iain Gray, chief executive of Innovate UK said: “As the UK’s innovation agency, Innovate UK and the network of Catapult centres we are developing exist to make sure that innovative products and services get to the market and the UK sees the economic benefit of that. A lot of those ideas we support come from the work done by our excellent universities, and I’m pleased that the BIS committee have recognised that in their report. Of course, we want to go further than we do already and help more businesses bring their ideas to market. The committee’s report makes a number of recommendations which could help us do that, particularly where they chime with Hermann Hauser’s recommendations on the future of the Catapult centres.

“As we said to the committee, nearly half of all proposals we receive warrant funding, but we can only actually fund 23%. That means that there are some exciting and innovative ideas that we aren’t able to give the support they need, despite our best efforts. We know that there’s more which could be done, and the committee’s report recognises the under investment in R&D compared with our competitor nations. If we want to have a truly innovation led economy we need to make sure that all of us, Government, researchers, innovators and investors avoid the temptation to take a short-term view and invest our time, effort and financial support into something that will have much longer-term benefits.

“Investing in innovation brings a positive return to the economy. So, with long term stability in the innovation landscape we will have the ability to make sure that the UK really goes the extra mile and turns great ideas into business success and a growing economy. At Innovate UK, we know that what we do works and I think the committee recognise that in their report too.”