University R&D is a good investment
1 min read
University research is a good investment, according to a recent report, which suggests the £3.5billion spent per year on publicly funded research generates an additional £45bn in UK companies. The data also suggests the benefits of research spending in higher education are greater than those from other areas of government supported R&D.
"£45bn a year is a good return on £3.5bn," says economist Professor Jonathan Haskel, pictured, from Imperial College Business School and coauthor of the study. "It's important to be able to put a proper figure on how public investment in university research correlates with private sector productivity for the first time."
There are two main challenges to working out how university research contributes to productivity. "First, universities openly publish new findings and make them freely available for use anywhere in the economy, so it's hard to follow a payment trail from idea to application," explains Prof Haskel. "Second, the private sector also invests in developing new knowledge, so we also need to account for these investments before looking at effects from universities."
The authors used 20 years worth of figures from the Department for Business, Innovation and Skills to construct a measure called private sector total factor productivity (TFP), which is the change in output not accounted for by typical forms of spending, such as labour and machinery investment. The TFP figures in the study are said to capture for the first time the contribution of 'intangible' activities, such as new technology, knowledge, skills and design.
