Politicians talk of a high-wage, highly productive economy, driven by investment in new technology. Well, that’s the idea and talk is cheap, because according to Government figures, the UK spends less on R&D than any other G7 economy.
At the fag end of the last Labour government, a target was set for R&D spending to reach 2.5% of national output by 2014. The latest figures show the UK is spending around 1.7% of GDP, which means that it is not only lagging all its G7 rivals, but is also in the bottom half of the EU league table for R&D spending. Depressingly, R&D spending is lower as a percentage of GDP than it was in the mid-1980s.
Addressing this weak performance is crucial to the future success of the UK economy, so it comes as no surprise to see the CBI calling on the government to prioritise innovation spending.
CBI director general John Cridland has called upon the Government to make innovation and science funding a priority in the upcoming Comprehensive Spending Review and has urged it to raise total R&D spending to 3% of GDP. He has also called for a dedicated and long-term industrial strategy to support that goal.
Both are growth-enhancing measures that would contribute to increased productivity, which has only just started to show signs of life after the financial crisis.
The role of institutions like Innovate UK and the catapult network will be crucial to meeting this target and Cridland is urging the Government to double the amount it spends on R&D. Currently, says the employers group, the Government spends a pitiful 0.49% of GDP on R&D.
Two years ago, manufacturers’ organisation EEF said that while ‘the policy landscape is right, it needs to be put on steroids’. Sadly, that still appears to be the case.
Wouldn’t it be great to live in a country that did more than talk about the need for innovation and actually delivered?
