Data released today showed that whole economy expenditure on R&D fell by 3% in real terms in 2012, as spending by both businesses and government dropped back. This is disappointing, as investment in R&D and innovation is critical if the UK economy is going to compete in fast-growing markets.
We already knew that Business Expenditure on R&D had fallen in 2012, largely as a result of a drop in expenditure by the pharmaceuticals sector. There was strength in sectors such as electrical machinery and transport equipment.
The drop in government and research council expenditure on R&D is a particular concern, as this expenditure has a key role to play in crowding-in private sector investment. This is a pertinent issue in the UK, where expenditure on R&D as a percentage of GDP lags behind many of our key competitors.
The government should cement recent positive policy steps to boost science and innovation by ensuring support joins up at every stage from basic research through to commercialisation to enable more companies to bring more products and services to market.