UK R&D spending falls by £2.8bn since 2021, raising concerns over growth ambitions
New figures released today reveal that total spending on research and development (R&D) across the UK economy – known as Gross Expenditure on R&D (GERD) – fell by 2% in real terms in 2023 compared to 2022. This marks the second consecutive year of decline, with total R&D spending now down by more than 4% since 2021 – a real-terms reduction of £2.8bn.
This decline, driven by reduction in both business and higher education R&D spending (which together account for around 92% of the total), comes at a time when R&D is increasingly crucial to the UK’s economic growth and industrial strategy.
NCUB’s director of policy, Rosalind Gill, said: “This fall in R&D spending should be seen as an early warning sign. While the figures reflect 2023 activity, they point to pressures that, if left unaddressed, could hold back the UK’s long-term growth ambitions. Preliminary OECD data shows that between 2021 and 2023, the UK recorded the worst growth in R&D spending among the G7, signalling a concerning divergence from our international competitors.
“At a time when the government has placed science, skills and innovation at the heart of its economic strategy, ministers must work with business and universities to reverse this trend. That means committing to a clear, long-term plan for R&D investment, targeting funding towards high-growth sectors such as advanced manufacturing, life sciences and clean technology, and providing stable policy signals and actions to unlock private investment. With these steps, we can turn this around and make R&D central to the UK’s industrial future.”
Findings
- UK GERD fell by 2% in real terms in 2023, following a 2.1% decline in 2022
- Since 2021, total R&D investment has dropped by over 4%, equivalent to £2.8 billion in real terms
- Business and higher education sectors account for around 92% of total R&D spending
- UK R&D intensity is now expected to be closed to 2.64% of GDP, a reduction from 2.69% in 2022.