Global research and development investment in the UK is currently suffering from a substantial black hole, falling by a fifth since 2014, according to new analysis.

Researchers at the Institute for Public Policy Research (IPPR) found a substantial drop in investment from 4.2% to 3.4%, despite consecutive prime ministers talking up science and innovation as a core part of their growth strategies.

Previous Prime Ministers, including David Cameron and Boris Johnson, promoted the UK as a home for R&D, with the government hoping to make the UK a ‘science superpower’ in the future.

Rishi Sunak, who has recently taken up the post, has also been a vocal supporter of UK tech in the past, and there is hope in the industry that he will continue this trend while Prime Minister.

However, the UK currently only places 11th in the OECD in terms of total R&D investment as a percentage of GDP, putting it well behind countries like Austria, Switzerland, and the USA.

According to the IPPR research, had the UK’s 2014 share of global R&D investment been maintained, it would have been £18 billion – or 26% – higher in 2019.

Supposedly, the UK would need to invest an additional £62bn this year – from public and private sectors – to overtake leading R&D spender Israel.

Additional modelling by IPPR indicated that state investment fuels private sector investment. For example, if the UK government invested a further £1bn in R&D, private sector investors would contribute an extra £1.36bn over 10 years. The UK is currently 34th out of 36 in the OECD for attracting inward private investment.

The Institute argues that if the government wants to pursue a growth agenda, investing in health sciences is significantly more effective than reducing corporation tax. No sector invests more in R&D, globally, than the life sciences.

Recent changes in ONS methodology have dramatically increased official estimates of public and private R&D spend, but the UK remains far behind international leaders.

The revised methodology means the UK has now technically met the government’s target of 2.4% of GDP invested in R&D. However, IPPR argued that genuinely additional R&D investment is vital to overcoming the UK’s lack of growth and low productivity.

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Shreya Nanda, economist at IPPR and the report’s author, said: “In the 20th century, R&D and the life sciences were the engine behind huge gains in human health and national prosperity.

“The Covid-19 vaccination has provided a reminder, in the 21st century, of the continued, transformative potential of science. However, whether it is researching new life-saving medicines or developing exciting technologies for the future, the UK is being left behind.

“There has been a managed decline in the UK over the past decade – a decline in our economy, our health and our resilience. R&D innovation is a vital lever in responding to this decline.

“We urge the government to increase R&D funding to restore the UK’s leading global position, encourage private sector investment and ultimately deliver economic growth.”

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