Business is calling on government to target raising the country’s R&D spend to 3% of GDP
The government has taken positive steps, developing a new industrial strategy including an extra £2bn public investment per annum on R&D.
Spending in the UK on R&D has stagnated at just 1.7% of GDP, below Finland (3.2%), Germany (2.9%) and France (2.2%).
1. Public funding and incentives
Public funding is a vital piece in the R&D puzzle, with evidence that government spend crowds in private sector expenditure and can lead to increases in total investment on R&D.
2. Culture and skills
Absorptive capacity in industry is vital for developing a competitive science and innovation ecosystem. The ability of a company to identify, understand and exploit knowledge developed in other parts of the innovation ecosystem relies on ensuring it has people with the right skills.
B2B and business-university collaboration offers the chance for companies to improve performance through developing new techniques or technologies, by de-risking investment in research, and by extending the capabilities and expertise available to them
4. Regulation and IP
The science and innovation ecosystem is significantly impacted by the wider business and social environment of the UK and factors like regulation play a critical role in a company’s investment and location decisions
5. Procurement in public services
Government currently spends about £268bn each year with external providers, working with private and voluntary organisations to deliver services. If developed strategically this spend can be used to drive innovation, with the twin goals of improving outcomes for the public and supporting sustainable public finances.