CaSE and British Academy join forces to assess the economic impact of UK R&D

A major new collaboration between the British Academy and the Campaign for Science and Engineering (CaSE) will provide up-to-date, robust and creative analyses of the economic returns of the UK research base. This analysis will generate a better understanding of the relationship between research, innovation and productivity growth, and contribute to strengthening the evidence base for the development of policies to support and promote innovation.

Building upon The Economic Significance of the UK Science Base (2014) and Understanding SHAPE in R&D (2023), the British Academy and CaSE have commissioned Cambridge Econometrics and Fathom Consulting to undertake complementary economic analyses, using creative approaches to deepen our understanding of economic returns of research and development (R&D).

Fathom Consulting will undertake an empirical, multi-country and multi-industry study to shed light on questions raised by recent revisions to R&D expenditure by UK businesses, generating a deeper understanding of spillover effects within and between industries. This study will inform key questions about the UK’s capacity to leverage economic returns in R&D: is the UK’s economic make-up less amendable to R&D spending; are we investing in the wrong sectors; and how might UK policymakers intervene to maximise returns on public and private R&D?

Cambridge Econometrics and the Innovation and Research Caucus will undertake a study to identify the strengths and weaknesses of the UK’s Research, Development and Innovation (RD&I) system. The focus of this study is not just on the value created and captured by the RD&I process, but also on when and where this value is first created and captured, and by whom. It will use a broad range of metrics to assess the UK’s capabilities across knowledge chains for a selection of technologies, followed by deeper case study investigation. The study aims to provide insights into the UK’s innovation system, highlighting areas of strength and identifying opportunities for improvement.

As our understanding of the economic impact of R&D shifts in the face of revisions to business R&D spend and ongoing economic stagnation, these complementary research projects will move beyond traditional rates of return analysis and contribute to improving the evidence base to generate more efficient and effective investment in R&D across the UK economy.