UK invests in R&D

UK firms increased their spending on research and development (R&D) by six per cent in 2007, according to the latest figures from the Department for Innovation, Universities and Skills (DIUS).

The annual report, which was published in collaboration with the Department for Business, Enterprise and Regulatory Reform (BERR), took data on spending from the 850 UK companies most active in R&D and the 1400 most active companies globally.

The results showed that the UK’s 88 largest R&D investors grew their research capacities by 10.3 per cent over the previous year, with global competitors averaging a 9.5 per cent increase.

Science and innovation minister, Lord Drayson, said: ‘The pleasing growth in R&D investment by UK firms for 2007 was achieved in largely benign economic conditions before the impact of the global economic downturn.

‘The future commercial success of UK companies and the wider UK economy requires continued investment in research and development.’

According to the survey, the pharmaceutical and biotechnology sector was the largest overall investor in the UK and globally.

Companies in the UK, USA, Japan, Germany and France contributed to the majority of the R&D investment, with 79 per cent of the £274bn investment being attributed to activities in the five countries.

UK R&D increased by six per cent, largely due to increased spending in the oil and gas production, software and computer services and pharmaceutical and banking sectors.

In response to the report, David Kingham, chairman of the R&D society, said: ‘The overall rise in R&D expenditure by the top 850 UK companies of six per cent to £21.6bn is welcome news, and shows continued confidence in UK companies of the value of R&D to their businesses.

‘The news that the top 88 UK companies, which also rank in the top 1,400 global investors of R&D, increased their R&D investment by 10.3 per cent, is offset by the scoreboard’s findings that the remaining companies outside the top 88 grew their R&D by just 1.2 per cent - a fall in real terms.

‘It is not clear from the scoreboard whether this reflects cuts in R&D activity or smarter spending by these companies, increasing their R&D efficiency.

‘Given that these figures are from a period prior to the current recession, we urge the government to keep a close eye on the R&D activities of UK companies and maintain and improve their efforts to support UK R&D.’

With pressure on the government to maintain R&D in the economic downturn, the Society of British Aerospace Companies (SBAC) has also urged ministers to do more to promote science and engineering in the UK.

In a statement, the SBAC said: ‘Current science and engineering policy is at best patchy and there needs to be more emphasis on the benefits that science and engineering bring to the UK.’

Ian Godden, chief executive of the SBAC, said: ‘Practical ways in which to achieve the vital aim of boosting science and engineering include greater funding for teaching these subjects, incentives for schools and colleges to work closely with local industry and ensuring that the secondary school curriculum does not lose the focus on the practical applications of these subjects.

‘Working more closely with industry would also assist the government in achieving this aim as well as helping it formulate more effective policies on these subjects.

‘A national strategy for science and engineering would ensure that initiatives are focused around the nation's needs and funded appropriately.’