R&D data: expenditure down, but there are pockets of growth

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Some slightly disappointing data on R&D this morning as manufacturers' real expenditure on R&D fell 3.6% in 2012.

However, most of this is driven by a fall in expenditure by the chemicals and pharmaceuticals sector, where expenditure fell by 13.6%.

Looking at the data more closely, there are a range of manufacturing sectors where there was strong growth. For example, as well as sectors which have long been strong for R&D – such as motor vehicles and aerospace – we saw impressive growth in investment in R&D by the UK textiles sector in 2012.

Manufacturing expenditure on R&D by sector

(percentage change y-o-y, 2011 compared with 2012)

Source: ONS 2013

Indeed, EEF research shows that many manufacturers are being increasingly ambitious about using innovation to meet the needs of existing customers and sell into new markets. We have a blog today from Group Rhodes which exemplifies just what R&D and innovation can mean for a company.

Nonetheless, today's figures are a reminder that the UK has some way to go. Total Business Expenditure on R&D remains at 1.1% of GDP, well below the levels for many international comparator countries. While policy has been moving in the right direction, the key message for government, is that it must build on the strong policy foundations it has put in place and be ambitious to drive up sustained increases in R&D spending.

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