UK lags behind other nations in research and development

The UK’s share of global research and development (R&D) investment has fallen by a fifth since 2014, according to new analysis by IPPR.

The drop, from 4.2% to 3.4%, has occurred despite consecutive prime ministers talking up science and innovation as a core part of their growth strategies – from David Cameron’s ‘jewel in the crown’ to Boris Johnson’s ‘science superpower’.

The UK only places 11th in terms of total R&D investment as a percentage of GDP, well behind countries like Austria, Switzerland and the US. Had the UK’s 2014 share of global R&D investment been maintained, it would have been £18bn – or 26% – higher in 2019.

According to IPPR research, the UK would need to invest an additional £62bn this year – from public and private sectors – to overtake Israel as the leaders in R&D spend.

Additional modelling by IPPR indicates that state investment fuels private sector investment. For example, if the UK government invested a further £1bn in R&D, private sector investors would contribute an extra £1.36bn over ten years. The UK is currently 34th out of 36 in the Organisation for Economic Co-operation and Development ranking for attracting inward private investment.

The Institute argues that if the government wants to pursue a growth agenda, investing in health sciences is significantly more effective than reducing corporation tax. No sector invests more in R&D, globally, than the life sciences.

Changes in Office for National Statistics (ONS) methodology have dramatically increased official estimates of public and private R&D spend, but the UK remains far behind international leaders.

The revised methodology means the UK has now technically met the government’s target of 2.4 per cent of GDP invested in R&D – although more by luck than judgement. However, the Institute for Public Policy Research (IPPR) argues that genuinely additional R&D investment is vital to overcoming the UK’s chronic lack of growth and low productivity.

The IPPR recommends government urgently sets a new stretching R&D target. Researchers have modelled three potential trajectories it could now follow:

The report concludes that health research is a particular opportunity for R&D investment. Just like the US government’s 1960s goal of putting a man on the moon, the UK needs a mission-based approach to life sciences policy. This would help align activity with broader social goals, communicate a clear sense of strategic direction and increase funding for R&D by crowding in new investment.

Shreya Nanda, economist at IPPR and the report’s author, explained: “In the 20th century, R&D and the life sciences were the engine behind huge gains in human health and national prosperity. The COVID-19 vaccination has provided a reminder, in the 21st century, of the continued, transformative potential of science. However, whether it is researching new life-saving medicines or developing exciting technologies for the future, the UK is being left behind.”

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