The UK government has stated its ambitions for the UK to be a science and innovation superpower, committed to doubling public investment in R&D to reach the target of 2.4% of GDP invested in R&D by 2027, with business contributing two thirds of investment.
Many businesses choose global locations for high value late-stage R&D activities, from multinationals to mobile innovative SMEs with growth ambitions. But existing UK support for late-stage R&D is not meeting businesses’ needs and is considered poor compared to competitor countries. There is a choice to be made: enable companies to take bold risks here, or they will go elsewhere. This report makes recommendations for government to support increasing late-stage R&D in the UK.
Late-stage R&D is a key part of the innovation process and accounts for the majority of R&D that businesses do. It comprises the activities required to take a proof of concept or prototype through to commercial application, ultimately delivering new products, processes, technologies and services to market, and wider socio-economic benefits.
How is late-stage R&D conducted and where can government play a role?
From interviews with engineering businesses, five key common resources essential for conducting and managing the risks associated with late-stage R&D were identified. Government can influence each of these resources to encourage business investment in late-stage R&D.
R&D infrastructure: the physical and digital infrastructures needed to test, certify and develop new products, processes, services and technologies safely and effectively.
Investment: the availability of funds and fiscal measures that enable businesses to allocate funding for late-stage R&D activities.
People: access and availability of diverse people with the experience and expertise to deliver technical and challenging projects to market.
Partnerships: the relationships, networks and collaborations that enable access to skills, infrastructure, investment and customers, reducing the burden placed on a single company through sharing resources and expertise with others.
Market environment: the policies and frameworks influencing and producing opportunity or challenge for businesses conducting late-stage R&D and commercialising innovation, including regulation, trade policy, intellectual property, and government strategies.
This report showcases how businesses conduct late-stage R&D and provides some real-world examples highlighting some of the key factors they have to consider.
Increasing R&D investment: business perspectives
Late-stage R&D: business perspectives is the follow-up report to the 2018 report Increasing investment in R&D: business perspectives.