Why the government’s Innovation Strategy must not become a missed opportunity

by Jeremy

Although the total amount of money invested in research and development (R&D) in the UK has increased from £17.6bn in 2000 to £37.1bn in 2018, the UK has a well-known problem with innovation. Namely, the proportion of UK GDP spent on R&D has barely risen at all, from 1.6% in 2000 to 1.7% in 2018.

IT innovation 2 fotolia

This is a problem because we know that increasing spending on innovation is vital for economic growth, with a strong link between product and service innovation and revenue growth. Investment in innovation also drives productivity growth – between 2000 and 2008, Nesta estimated that 51% of labour productivity growth came from investment in innovation, with 19% of this coming from investment in intangibles such as training, marketing, software and design. As we recover from the impacts of the Covid-19 pandemic, increased investment in innovation will be vital for our recovery. Yet at the same time, growth in innovation spending has slowed, while the cost of the invention has risen. For example, companies now need, on average, 18 times more researchers to achieve the doubling of computer chip density than in the early 1970s.

These are problems and issues that the government’s recently published Innovation Strategy recognizes. IThe strategy articulates the benefits that innovation can bring to the UK economy and society. in the strategy

The strategy sets its ambition to reverse the sluggish increase in innovation spending, aiming to make the UK a global innovation hub by 2035. Pointing to key metrics such as the Global innovation index, the World Bank’s Ease of doing the business survey and OECD monitors of innovation activity, the government clearly sets out how stakeholders are to judge its success.

Related Posts

Leave a Comment