Government tax incentives have failed to halt a decline in research
and development investment by UK businesses, according to the latest
global league table.
R&D spend by UK companies has fallen for a second successive
year, this time by one percent to ?7bn ?despite an overall rise of
five percent across the world's top 1,000 organisations, whose R&D
budgets total ?20bn.
The Department for Trade and Industry's R&D scoreboard also
shows that the two percent European R&D growth is well behind the
high-tech economies in Asia. South Korea and Taiwan now contribute 33
companies to the global 1,000, with Hyundai and Samsung among major
investors in R&D.
China too saw double-digit growth in R&D spend and is predicted to overtake Europe in the percentage of GDP it spends on R&D within five years.
One of the reasons cited for the UK and Europe's poor performance in
the R&D league table is that they have fewer companies in R&D
intensive high-tech sectors such as IT and electronics and are instead
over-represented by 'old industry', food manufacturing, oil and
utilities firms.
The three largest R&D sectors globally are automotive, IT
hardware and pharmaceuticals, while pharmaceuticals, automotive and
aerospace grew the most rapidly amongst the top 10 sectors, according
to the report.
Science and innovation minister Lord Sainsbury said in the report:
"The UK is facing increasing competition from rapidly growing economies
including India and China. In order to meet these challenges, the UK
must build on its strengths of science and innovation, competing on
ideas not on low wages."
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