Tech­nol­ogy re­search spend­ing too low to com­pete, says CBI

Em­ploy­ers call­ing for R&D to be 3% of Bri­tain’s GDP Tar­get needed to avoid los­ing global sci­ence race

The Guardian - - FINANCIAL - Katie Allen

Bri­tain must Brexit-proof its econ­omy by ramp­ing up re­search and devel­op­ment spend­ing or risk be­ing left be­hind in ar­eas such as space tourism and ro­bot­ics, the CBI has warned.

It will launch a cam­paign to­day to urge the gov­ern­ment to adopt a tar­get for R&D spend­ing to be 3% of GDP, com­pared with the cur­rent level of just 1.7%. Adopt­ing a tar­get would show for­eign in­vestors and aca­demics that the UK can re­main a hub for in­no­va­tion and sci­en­tific col­lab­o­ra­tion in a post-Brexit world, the CBI will ar­gue.

It will say that de­spite gov­ern­ment plans for a new in­dus­trial strat­egy and more spend­ing on in­no­va­tion, the UK’s po­si­tion as “world lead­ers in sci­ence and in­no­va­tion” is at risk.

“Our spend­ing on R&D has stag­nated at just 1.7% of GDP, with both pub­lic and pri­vate sec­tors un­der-in­vest­ing,” the CBI re­port says.

It warns of a grow­ing chal­lenge from Asian economies, no­tably China which in­creased its share of global R&D spend­ing from 2.5% in 1996 to 19.6% in 2013. China also out­ranked the UK when mea­sur­ing its R&D spend­ing as a per­cent­age of GDP, with a level of 2% in 2014.

The CBI be­lieves hit­ting a 3% tar­get by 2025 would be achiev­able. “Now is the mo­ment for the UK to up its game,” said Felic­ity Burch, the CBI’s head of in­no­va­tion and dig­i­tal.

“We had the Brexit vote last year and ar­ti­cle 50 is fast ap­proach­ing, we need to think se­ri­ously about what our econ­omy looks like and how we com­pete glob­ally.

“We ac­tu­ally have a real op­por­tu­nity in terms of the new in­dus­trial strat­egy... It’s re­ally clear the gov­ern­ment is tak­ing in­no­va­tion se­ri­ously but we need a real vi­sion about the out­comes we want.”

A mea­sur­able tar­get would help fo­cus gov­ern­ment and busi­ness on the need to in­crease spend­ing, the CBI ar­gues.

It cited ev­i­dence of other groups, in­clud­ing the House of Com­mons Sci­ence and Tech­nol­ogy Com­mit­tee, ar­gu­ing for 3% as a level proven to boost growth and jobs. The EU also has a tar­get of 3% of its GDP to be in­vested in R&D by 2020.

The UK’s spend­ing on R&D has stag­nated for years, fluc­tu­at­ing be­tween 1.53% and 1.68% of GDP since 1998.

Fig­ures pub­lished last week show R&D spend­ing was £31.6bn in 2015, a rise of £1.2bn on 2014. It was 1.68% of GDP in 2015 com­pared with 1.66% in 2014.

The CBI’s re­port says: “Gene edit­ing, space tourism, self-driv­ing ve­hi­cles, ro­botic limbs, float­ing farms, Lon­don to Syd­ney in four hours. Game-chang­ing in­no­va­tions like these will shape the course of the next decade.”

“Com­pa­nies and gov­ern­ments are un­der pres­sure to keep up.”

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