UK R&D – generating long-term competitive advantage

Overview

The UK is renowned for the quality of its R&D and is continually building on its strengths in science and innovation. The Government has more than doubled its annual investment into science to £3.4 billion since 1997. Such investment has produced impressive results. The UK research base now ranks second only to the USA, with Oxford and Cambridge acknowledged as two of the world’s top three universities.

Indeed, the quality of our academic institutions is the key to the UK’s R&D strength; eight of the world’s top 50 universities are based here. Unsurprisingly, UK universities are the leading academic participants in European programmes and provide the means to tap into European, indeed global, research networks on the back of their research excellence.

The key to success, in an increasingly competitive world, is developing an innovative ‘ecosystem’ which enables firms to identify knowledge and research excellence wherever it is located – in universities, in research institutes, in high-tech small and medium-sized enterprises or in larger firms – and to encourage collaboration in order to exploit the opportunities.

The Government has therefore invested heavily in fostering such an approach, transforming the culture of our universities to encourage closer working with business, and targeting support for business by promoting Knowledge Transfer Networks and collaborative R&D in projects in key technology areas.

Furthermore, the Government offers generous tax credits to UK-based business engaged in R&D. As a result, the UK has developed dynamic, innovative clusters in a wide range of technologies and many overseas companies have established R&D centres in the UK to capitalise on this open innovation ‘ecosystem’. In fact, around 45 per cent of all business R&D undertaken in the UK is funded by overseas-owned companies.