UK £62 billion behind in R&D global investment share, report reveals

The UK’s share of global research and development (R&D) investment has fallen by a fifth since 2014, according to recent data analysis by the Institute for Public Policy Research (IPPR).

The UK is in 11^th place in R&D investment as GDP percentage compared to other members of the Organisation for Economic Co-operation and Development (OECD), far behind international leaders, despite meeting the government’s target of 2.4 percent GDP R&D investment. According to IPPR’s research, the UK would need to invest an extra £62 billion in 2022 to overtake Israel, the leading R&D spender.

The UK’s global share of R&D investment would have been £18 billion (26 percent) higher in 2019 if it had not decreased from 4.2 percent to 3.4 percent in 2014.

IPPR indicated that state investment drives private sector investment. If the UK government put an additional £1 billion into R&D, investors in the sector would contribute an extra £1.36 billion over a decade.

The report suggested health research is a key area for R&D investment to align activity with broader social goals, communicate a clear strategic direction and improve R&D funding by crowding novel investment. 

IPPR recommends the government should increase public investment, so more NHS staff can be involved in clinical research. The IPPR’s analysis showed the UK has eight times less government researchers than Germany.

Three trajectories the UK could follow to boost investment position, according to IPPR

Somewhat ambitious:

• Meet three percent of GDP by 2027, building on aspirations set out by the Confederation of British Industry (CBI), the European Commission (EC) and opposition political parties
• The government would need to invest an extra £1 billion in R&D by 2027. Private investment would also need to rise by £0.8 billion in the same year.

More ambitious:

• Meet 3.5 percent of GDP by 2030, to level with R&D investment in Sweden, the US and Taiwan
• An extra £8.5 billion in R&D would need to be invested by the government by 2030
• Private investment would need to increase by £8.3 billion in the same year.

Genuinely world-leading:

• Meet 5.4 percent of GDP by 2030, establishing the UK as a global leader, closely levelling investments by South Korea and Israel
• Public investment would need to grow £43.1 billion by 2030
• Private investment would need to grow by £41.9 billion in the same year.

IPPR economist and the report’s author, Shreya Nanda, stated the UK is behind when researching new life-saving medicines or developing exciting technologies for the future.

Nanda added: ”R&D innovation is a vital lever in responding to this decline. We urge the government to increase R&D funding to restore the UK’s leading global position, encourage private sector investment and ultimately deliver economic growth.”