We can’t afford to trail competitors on innovation

AS VARIOUS research studies have shown, economies that consistently invest in innovation reap the rewards in higher productivity, better jobs and stronger exports. For the UK, innovation matters more than ever and after more than a decade of sluggish productivity, we cannot afford to stand still as competitors improve their economies.

- DYLAN JONES EVANS

The recent figures on research and development (R&D) expenditure released by the Office for National Statistics show that the picture at the UK level is mixed but broadly positive. Total expenditure on R&D performed in the UK reached £72.6bn in 2023, an increase of £3bn compared with 2022 and £14.3bn more than in 2018, which is the first year for which comparable figures are available.

Business continues to dominate R&D activities, undertaking £50bn (or 69% of the total) while higher education delivered out £17.1bn (24%) and the government sector (including UK Research and Innovation) £4.3bn (6%). Private nonprofit organisations spent £1.1bn or 2% of the total. There was also a healthy pipeline of innovation across sectors, with business expenditure increasing by £14bn, higher education by £900m and government by £700m.

Yet if the UK overall is moving in the right direction, the regional story tells us just how unevenly this investment is distributed. The so-called “golden triangle” of London, southeast England and the east of England together accounts for more than half of all R&D in the UK, with London alone seeing a year-on-year increase of over £2bn.

However, other parts of the country went backwards, with northwest England, southwest England and Wales all declining in total R&D expenditure. And while this regional imbalance is not new, it is becoming more entrenched, with areas that already have strong research ecosystems increasing their advantage while others are struggling to catch up.