Mapping the economic returns of R&D in the UK

This synthesis draws out key policy implications from the findings of a report commissioned by the British Academy and CaSE. The systems-based analysis of the strengths and weaknesses within the UK’s innovation system, ‘From Research to Productivity: A Systems Analysis of UK Innovation Pathways’, was conducted by Cambridge Econometrics.

The report assesses the UK’s performance in research, commercialisation and adoption by examining ten technologies. It provides detailed case study analysis and comparative evidence with a view to identifying the most promising points of government intervention within the innovation system.

To better understand the UK innovation system, the report uses ten case study technologies chosen to represent a range of sectors and disciplines. These case studies align with the previous Government’s (2022-2024) 2023 Science and Technology Framework, and the eight “growth driving” sectors and wider framing of the current Government’s modern industrial strategy green paper. The ten technologies analysed in this report include:

• Semiconductors
• Agricultural gene editing
• Artificial intelligence
• Industrial robotics
• Innovative galleries
• Mobile technologies
• mRNA vaccines
• Modern supply side economics
• Offsite construction
• Quantum technologies

The report takes a systems approach to capture and measure the non-linear and interconnected processes underpinning innovation. This approach offers a useful framework for assessing how research, commercialisation and adoption interconnect and influence each other to create feedback loops.

The analysis also shows that distinct differences in dynamics appear between sectors that produce goods and services that can be sold internationally (tradeable), and those that are primarily developed within the domestic market they serve (non-tradeable). A central finding is that while the UK has strengths in creating knowledge, it faces barriers in capturing value from technology-based innovation pathways. However, these barriers differ depending on specific technology and market characteristics.

The aim is not to highlight innovation ‘winners’ or to put these example technologies in direct comparison with each other. Rather, it is to highlight that an understanding of market structures and a tailoring of policy approaches may help generate better economic returns on R&D and innovation investment.