Last week saw the publication of the Labour, Liberal Democrat and Conservative manifestos, setting out their policies ahead of the UK General Election on 8 June.
In our first manifesto blog post we take a look at what the Parties have said so far about investment in research, development and innovation. Our subsequent editions will look in more detail at what the parties have said on skills, and the broader research environment.
Research, Innovation and Investment:
All three set a target for increasing total investment into research and development (this target includes public, private, third sector and overseas investment into UK R&D). Labour set a target of 3% of UK GDP to be spent on research and development by 2030. The Liberal Democrats outline a long term goal to double R&D spending across the economy (which currently sits at 1.68% of GDP), and the Conservative manifesto sets out a long term goal of 3% of GDP to be spent on R&D, with a shorter-term target to at least match the current OECD average of 2.4% within the next ten years.
This is really positive. The Royal Society is one of many organisations including the CBI, Universities UK, the Campaign for Science and Engineering and the Wellcome Trust that have been calling on the government to set a target of 3% of UK GDP to be invested into UK R&D to signal the UK’s ambition to compete internationally as one of the best places in the world to research and innovate.
But achieving this target is not just about direct government investment in R&D, it is also about creating an environment where others – industry, charities etc – also invest in UK R&D to bring us closer to 3%. Business investment in R&D as a percentage of GDP is lower in the UK than many of our international competitors, lagging behind both the OECD and EU averages.
However we do know that Government investment in Research and Development stimulates investment from other sources (PDF). Analyses suggest that for every £1 spent by the government on R&D, private sector R&D output rises by 20p per year in perpetuity, by raising the level of the UK knowledge base – so the volume of government investment is important.
At the moment government investment makes up 21% of the total UK investment in R&D (according to the latest ONS figures for 2015). The Conservative and Liberal Democrat manifestos both confirm that they will protect the current government investment in R&D, including the extra £4.7 billion by 2020-21 into science and innovation over four years that was announced at the 2016 Autumn Statement. But beyond that, none of the manifestos spell out further specific monetary investments in research at this stage.
Another considerable investor in UK R&D is the EU. As a Member State the UK contributes to the EU and currently receives significant funding for Research and Development through schemes such as Horizon 2020 and the European Structural and Investment Funds (if you want to learn more about these, read our latest report). To ensure that UK researchers can still compete for this funding, the Conservative government has committed to underwrite the value of any EU grants awarded to UK researchers for the full award period. There have been calls to extend this commitment to continue UK participation in Horizon 2020 to the end of the programme. It appears that the Liberal Democrats may go further in their manifesto by guaranteeing to underwrite funding for British partners in EU-funded projects such as Horizon 2020 who would suffer from cancellation of income on Brexit, but the wording is a little unclear.
The UK’s future engagement with EU research programmes is up for debate in the upcoming Brexit negotiations, however both Labour and the Liberal Democrats have outlined their desire to retain access to Horizon 2020 (and we assume its successors). There is no specific mention of Horizon 2020 in the Conservative Manifesto, however they have announced that post-Brexit, money that would previously have been earmarked for the European Structural and Investment funds will instead be invested in a UK Shared Prosperity Fund. They propose that a consultation will follow on how this will be spent.
Of course successful UK research isn’t just about investment – as we discussed above, it also rests on creating the right environment with a mix of skilled people, the world-class research institutions for them to work in, an ability to attract and work with the world’s best as well as grow the UK’s best, and a regulatory environment that is conducive to innovation.
The Industrial Strategy is a key tranche of the Conservative government’s approach to delivering this following the UK’s referendum and was kicked off with a Green Paper in January 2016. This is intended to set out a plan to improve living standards and economic growth by increasing productivity and driving growth across the whole country. Investing in science, research and innovation and developing skills form two of the ten pillars. We’ll be unpicking the detail of the party manifestos and their proposals for the Industrial strategy as a whole, focusing on what they have to say about skills and broader research environment over the next week.