UK lags behind on research and development spending

The UK has fallen behind its counterparts in the G8, the forum for powerful industrialised nations to discuss common problems with members including the UK, USA, Japan and France, in spending on research and development.

The Government spends just 0.49% of GDP on research and development, which is the lowest figure among G8 nations.

Research and development is a bedrock of economic growth. Without innovation the UK will lose out to more dynamic economies that drive technological innovations, which help their economies to prosper.

The CBI asks that research and development spending be raised to 3% of GDP, but that this should also be accompanied by a long-term industrial strategy.

The Government are about to begin the forthcoming Comprehensive Spending Review (CSR) and it is with this in mind that the CBI demand more investment be held back for research and development.

John Cridland, CBI director-general, said:

“Our research shows that innovation investment has never been more important, given its effect on enhancing productivity.

“While our economy is doing well, we must not be complacent, as we cannot afford to rest on our laurels while our peers pace ahead.

“Instead we need to build on our research excellence by fuelling the UK’s innovation ecosystem with investment, fresh ideas and skills.

“With the UK’s research and development spending the lowest among the G8, we are falling ever further behind our international competitors and must take action so that we lead from the front.”

The CBI also calls on the government to:-

- Set out a coherent framework so innovation boosts the capacity of the economy to produce more in the long term

- Deliver a package on business rates reform that makes the regime, simpler, fairer and more competitive

- Fix the funding ladder for medium-sized businesses to ensure they can grow and contribute more to the economy

- Ring-fence revenue from the apprenticeships levy and introduce an independent ‘Levy Board’ to set the rate based on sound economic evidence

- Avoid further restrictions on skilled migration, which would harm the UK’s ability to attract investment and compete globally

- Continue cross-government efforts to promote exports

The DMA would echo the view of the CBI, the UK has long been a centre of incredible technological innovation, which bolsters the economy. Falling behind on innovation will affect the digital revolution in this country, which is transforming one-to-one marketing.