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Existing R&D strategy and commitments should underpin UK economic policy, says Jane Gate
Following the government’s recent announcement of its growth plan and the welcome appointment of Nusrat Ghani as science minister, the UK’s innovation, research and technology sector is eagerly awaiting chancellor Kwasi Kwarteng’s medium-term fiscal plan. This should bring much-needed certainty to the UK’s R&D ecosystem.
We know that prime minister Liz Truss’s government has made economic growth its number one priority, which is a welcome move. As part of this, it is critical that the government keeps to commitments to public investment in science and innovation made in the 2021 spending review and delivered through the Innovation Strategy of the same year. These are aimed at boosting and levelling-up economic growth, and would give private investors confidence.
In the week before the Growth Plan was unveiled, the Association of Innovation, Research and Technology Organisations (Airto) put forward representation to the Treasury and the business department calling for growth powered by innovation. This highlighted the policy interventions needed to deliver an innovation-led strategy to address the UK’s immediate economic and societal challenges and, longer term, develop an energy-secure net zero economy.
To achieve this, the government must continue to recognise and invest in innovation as a key mechanism for boosting growth and supporting businesses to become more resilient. Innovation is also a key mechanism for tackling the climate crisis and safeguarding energy security.
This means continuing to strive for science superpower status by supporting fundamental research for the long term, while also backing the development and application of R&D vital for short- and medium-term economic and societal wellbeing.
Foundations in place
Increasing support for development and innovation activities—without compromising investment in early stage research—would equip the UK’s science and innovation infrastructure to meet industrial needs, driving up productivity and prosperity. An innovation-led strategy has the potential to dramatically increase the UK’s commercial exploitation of science and innovation to boost business growth.
The foundations for such an approach are already in place, in the shape of the 2021 Innovation Strategy and the spending review’s commitments to public investment in science and innovation. The government should see the Innovation Strategy as integral to its battle against inflation and the energy crisis.
The UK’s innovation, research and technology sector employs 57,000 highly skilled people. It has a combined annual turnover of £6.9 billion and contributes £34bn to GDP. It should be an integral part of a science and innovation strategy aimed at attracting the private investment required to achieve the goal of spending 2.4 per cent of GDP on R&D by 2027.
In the short to medium term, supporting R&D activities aimed at accelerating the adoption of new technologies by companies would deliver a boost to growth. Longer term, stimulating close-to-market innovation right across the UK—building on existing capabilities and investing in skills and talent—is a central component of the Innovation Strategy, and key to lasting growth and levelling-up. There is ample scope for more innovation activity in the UK: in the past, Airto has highlighted that, relative to similar economies, the UK underinvests in ‘D’ activities relative to ‘R’.
Improving support for development and innovation activities, and enhancing innovation infrastructure, are important to meeting industrial needs and driving productivity and prosperity. However, it bears repeating that continuing strong support for the fundamental research needed to sustain the UK’s world-leading science base is critical, if the quest to become a science and technology superpower is to succeed.
Taking lessons from the Covid-19 pandemic about national resilience will be key to the success of the policy response to the current economic crisis. The pandemic showed the importance of agility in decision-making, and of having the right people and skills in place. The government can achieve this by building on existing capabilities, including investment in skills and talent, and recognising that people are critical to the research and innovation landscape.
An innovation-led growth strategy offers the potential to increase the UK’s commercial exploitation of science and innovation. The medium-term fiscal plan will be a key opportunity for the government to continue to provide stable and consistent policy and investment for science and innovation, and evolve a transparent national plan for R&D with a clear systems approach.
Jane Gate is executive director of the Association of Innovation, Research and Technology
This article also appeared in Research Fortnight