UK research investment rises in 2018

Latest figures shows increases to public and private R&D investment

The world is clearly in a rapid state of change right now, and alongside taking all the necessary steps to stay safe we are operating very much as business as usual. Part of that business as usual involves us sifting through the latest statistics on UK R&D investment, detailing research expenditure in 2018. This statistical publication is the first to report UKRI as a single entity but this will not change the balance of public investment figures as the investments are still made from the public sector. This release also gives us the opportunity to check the Government’s progress against commitments made in the 2016 Autumn Statement, as well as checking on the health of private sector investments in UK research.

In 2018, the ONS estimates that just over £37bn was invested in UK R&D, an increase of nearly £2.5bn from 2017. What is particularly pleasing to see is that investments increased across sectors, with increases from the UK Government, businesses, private non-profit and from overseas. As a proportion of GDP, UK investment in R&D rose to 1.71% of GDP, the highest figure in 30 years.

Public investment in research increased by £600m between 2017 and 2018, much of which will have originated from the 2016 Autumn Statement settlement for the National Productivity Investment Fund (NPIF). It is positive to see that commitments made in 2016 survived a General Election, considering further increases to NPIF will be invested in R&D until 2020/21 in addition to the new commitments made in the 2020 budget. This increase is nowhere near the scale that we will begin to see over the next few years, however it signals an important time of change from a decade of flat-cash.

Private expenditure rose by £1.5bn in 2018, continuing the long-term trend that has seen consistent real-terms growth in R&D investment over the last decade. Indeed between 2009 and 2018, investments by businesses, private non-profit organisations and from overseas increased by 38% in real-terms. The strength of private investment in R&D at a time of stagnant growth in public R&D investment is very positive, and the Government will certainly be hoping that greatly increasing it’s support for R&D will yield even greater investments from the private sector.

The current global situation however may mean that companies need to reassess their investment priorities or their ability to continue to invest in R&D. Whether they are UK-owned companies being forced to scale back operations, or the repatriation of investments by overseas companies could present a significant challenge for the UK. This would also cause a significant headache for the government, given private investment has been so strong.

Public investment was £9.6bn in 2018, which is an indication of just how ambitious the Government’s commitment to increase public investment to £22bn by 2024/25 is. Alongside this increase, the development of a plan of how public investments will be made over the coming years will be more important that ever in attracting private investment to help springboard the UK to reach a research intensity of 2.4% of GDP.  There are a dozen countries that have successfully increased their respective research intensities by at least 0.7% in the same time period, but none have done so without increased investment from public and private sectors.

We have taken these statistics from the ONS website, namely the Gross domestic expenditure on research and development, UK: 2018 statistical release. The ONS also produce an informative brief on the statistics.