New data highlights concerning decline in private R&D investment
Business research and development (R&D) investment in the UK has fallen, according to new data released today. In real terms, investment dropped by 3% to £50bn in 2023 compared to 2022, continuing a downward trend that has seen a decline of over 6% since 2021 – a drop of £3.4bn in real terms.
This decline comes at a critical time, when the government must focus on fostering a globally competitive R&D environment through sustained public investment and collaborative efforts with businesses, universities and others.
Rosalind Gill, head of policy and engagement at the National Centre for Universities and Business said (NCUB), commented: “The data paints a difficult picture: businesses appear to be spending less on R&D in the UK. Indeed since 2021, the amount businesses spent on R&D has declined by £3.4bn in real terms. The UK is an incredibly attractive place for R&D investment, with world-leading research and talent. We must understand why investment seems to be dropping, and what can be done to reverse it. Difficult operating environments and rising global competition are likely to be factors.”
Gill continued: “We know that government funding acts as a critical catalyst, encouraging greater private sector investment. Indeed, our recent analysis reveals that every £1 of government R&D spending generates an additional £3.09 to £4.02 of private sector investment in UK R&D – nearly double previous estimates. This underscores the significant return on public R&D funding and highlights its crucial role in attracting private investment. We are calling on the government to secure the UK’s status as a major global economic player. Only by creating a thriving environment for research, innovation, and collaboration will we achieve a research-intensive, innovation-driven economy.”
Gill concluded: “Recognising the urgency of the challenges ahead, we have formed a Taskforce of industry leaders to develop practical, costed recommendations aimed at boosting business-led R&D and fostering innovation. The time to act is now. The UK’s future as a global leader in research and innovation depends on decisive, collaborative action to reignite R&D growth.”
