Building on the UK’s scientific strength for the next decade and beyond

CaSE has published a new report, ‘Building on Scientific Strength; The Next Decade of R&D Investment’, on how the Government can stimulate a rise in the UK’s research intensity.

The UK Government has committed to increasing the UK’s research intensity by around a half, from 1.7% of GDP to 2.4% GDP over ten years, to create a more scientifically-enabled economy, drive productivity across the UK and bring R&D investment in the UK closer in line with other leading scientific nations.

Commenting on the report, CaSE Director, Dr Sarah Main, said: 

“The Government has set out to transform the UK’s economy for the future, setting an ambitious target for the next decade of R&D investment. Our members have told us how to make this a reality. Government needs a compelling vision for a scientifically-enabled economy with a plan and a budget that attracts cross-Government support and global attention. It needs to invest in the UK’s exceptional science base which is an attractor for global money and talent, by sustaining its unique breadth and by making R&D infrastructure and future skills an early priority.”

“Our members tell us that Government can do more to reach new overseas R&D businesses and support UK start-ups by easing the introduction to the UK’s support for innovation, ensuring it is simply expressed and tuned to business needs. It can make the fiscal environment internationally competitive by optimising what works well, for example by updating R&D tax credits. And it can ensure an attractive market for innovation and the delivery of direct benefits to the UK public by using the power of Government procurement to adopt innovation faster.”

R&D investment required to meet the target

The Government has made an initial pledge of an additional £7bn to UK R&D between 2016 and 2021. Ahead of the next Spending Review, CaSE calls on the Government to increase the scale of step-wise increments in R&D investment over the next five years, calculating that the Government needs to invest an additional £20.2bn between 2020/21 and 2024/25 to meet its target – around treble its initial commitment. This £20bn investment would attract a calculated £28bn of leveraged research investment from private sources over 15 year. Furthermore:

• CaSE’s calculations show that failure to provide additional public investment in R&D would lead to stagnation, leaving the research intensity of the UK economy at 1.7% of GDP, which may even decline to 1.6% of GDP by 2027. This would represent a £12bn shortfall against the Government’s target in 2024.
   
• If the Government continues to invest new money at the initial rate, but does not increase that rate, CaSE’s calculations show UK research intensity will grow but the Government will miss its target substantially, reaching 2.0% of GDP by 2027. The shortfall against the Government’s target in 2024 would be £6.5bn.

Recommendations on what Government can do to increase public R&D investment and incentivise private R&D investment.

To increase public R&D investment:

• Government needs a vision with a plan and a budget, that attracts cross-Government support and global attention. 
• New funding should sustain the unique breadth of the UK’s academic science base, which is an asset for discovery and global research partnerships
• Government should front-load investment in research infrastructure and future skills to ensure UK R&D capability can sustain growth

To incentivise private R&D investment, Government should:

• invest in the science base because its exceptional strength is the primary reason R&D companies come to the UK
• package the UK’s innovation offer simply and with greater appreciation of business needs
• use the power of Government procurement to adopt innovation faster
• make the fiscal environment for R&D internationally competitive by updating R&D tax credits   

#CaSEforresearch

Alongside this report we are setting out a vision for what increased research intensity can achieve for the UK economy, people’s lives and their health and wellbeing by publishing a series of thought pieces by CaSE members and stakeholders on our website, alongside further analysis from CaSE.