Research and development (R&D) in Europe accounts for 20% of the world’s investment in R&D and a significant contributor is based on the world class science the UK delivers.

Considering the UK holds only 1% of the world’s population and 3% of the global spend on research funding, the nation impressively accounts for 12% of all research citations and 16% of the most highly cited articles.

While such statistics appear as impressive, they do not  translate to the UK’s innovation output. When comparing the world class research undertaken in the UK to what is achieved in innovation there is a clear inconsistency.

The UK is not great at translating its research into economic benefit and have not been great at this for quite some time. Over the last five years the highest Innovation Efficient Ratio (IER) position has been 14th and currently the country is sitting in position 21 out of 127.

In an effort to increase the UK’s research into economic benefit, the government has published an Industrial Strategy to make the UK the most innovative nation by 2030, investing £1.6bn towards innovation in the Autumn budget. The new strategy will consist of four grand challenges:

  • The need to harness our artificial intelligence and data capabilities
  • Support the potential for cleaner growth
  • Take the steps to support our ageing population
  • Enable people to move around more freely

In addition to the above strategies the government aims to increase R&D spending from 1.7% to 2.4% by 2027 and with a longer-term target of 3%. While this may appear as a realistic target that many other nations have achieved, for the UK it is unlikely to be achieved through a material increase in public investment. Currently, around 50% of investment in R&D in the UK comes from business, which is considerably lower than Korea and Israel, where business contributes 80% of all R&D investment.

The keys to success

Whether it be through specialist R&D knowledge and results or through high availability of researchers, companies want it to be easy to find the right talent when required, therefore access to skills, collaboration across frontiers and information are critical. Universities play a significant role to accessing the vitality of the UK’s base of public sector research establishments.

It is believed that the UK needs to join the dots between publicly funded research facilities and private sector R&D to establish a national research and innovation infrastructure. This will close the gap between the two sectors, enabling public spending to leverage private investment and accelerate the innovation process.

Innovative industries and companies are greatly supported by the government and can be eligible to receive an R&D Tax Incentive. Swanson Reed R&D Tax Consultants help companies to claim this incentive and receive the maximum eligible amount. If your company is developing novel solutions, take our online eligibility quiz to find out whether you qualify for a tax rebate.