If R&D investment continues at the current rate of growth the UK would not reach the 2.4% target until 2053, 26 years too late, according to the CBI in a new report.
The Government has set out an ambitious target of raising R&D investment to 2.4% of GDP by 2027, but at its current pace of spending the UK it is set to miss the mark – by 26 years. This matters, says the CBI, because it’s through R&D that we will tackle the most pressing issues facing society from climate change to the future of transport.
Currently, the UK’s R&D investment level lag behind top performing European countries like Germany, which only last week announced an extra £17 billion boost to R&D funding in the next decade.
Unveiling a major new report, The Changing Nature of R&D, The CBI reveals how advanced data analytics is opening up a ‘new frontier’ for business R&D, which could help address this potential spending shortfall. Businesses are increasingly using data as key input in their R&D, and it’s opening opportunities across all sectors.
But among many companies, data is an underexploited asset because businesses are facing a range of challenges; from skills shortages to navigating funding support. It is therefore crucial that the policy and funding landscape evolves to keep pace with new innovation trends. This could help unlock £46 billion a year to the UK by 2020.
Felicity Burch, CBI Director of digital and innovation said: “The Government must speed up its effort to hit the 2.4% target or the UK is at risk of falling further behind. Advanced data analytics are opening up a new frontier for UK R&D, to ensure we benefit we must have a comprehensive roadmap underpinned by a boost in public funding to spur growth in UK R&D investment.
“If the UK is to reap the benefits of the data revolution the Government’s roadmap must ensure that the R&D tax credit is modernised, that businesses are able to collaborate with universities on data, and simplify access to innovation support through a ‘one-stop’ shop.”
The CBI is calling on Government to act on its commitment to delivering the 2.4% target by publishing a comprehensive roadmap and setting out a long-term trajectory for government R&D expenditure.
Make it easier for businesses to navigate innovation support. It says the government should create a ‘digital one stop shop’ that clearly outlines and signposts the range of innovation support that businesses can access.
It also wants new support for businesses to develop the capacities they need to understand and unlock value from their data and for the government to deliver the world’s most competitive R&D tax credit by ensuring that it recognises the growing importance of data-driven R&D.
Businesses are unsure of the value of data and how to exploit it. Companies are currently only capturing a fraction of the potential value from data and analytics.
Less than 10% of UK businesses use CRM to collect, store, and share customer information within their businesses.
Only 4% of companies report having the right people, tools and data to be able to draw meaningful insights from data.