Getting better value from public sector research ... - CentreForum

Getting better value from Public Sector Research Establishments
: Introduction
The role of R&D in the economy
Research and Development (R&D) is an essential part of
innovation in a knowledge-based economy, increasing
productivity whilst stimulating growth. It is, however, often
underfunded because it carries short term risk, despite its
longer term potential profits and positive externalities.
The Plan for Growth has pledged to provide “practical
support to help UK IP-intensive businesses exploit their IP
in key overseas markets by strengthening relations with IP
authorities and increase R&D cooperation.” However, the
challenges for innovation and invention are twofold.
First, Britain underfunds research. It spends around 1.8 per
cent of its GDP on R&D, which is below the EU’s Lisbon
Target of 3 per cent. In order to meet the BIS target of 2.5 per
cent of GDP by 2014, the Government can invest directly in
research. It can also seek to attract private capital, both from
domestic and foreign investors, by increasing incentives to
conduct research. Tax credits, for example, have been used
to stimulate private investment particularly from SMEs,
which have been shown to be improving.
Second, Britain has been poor at exploiting innovation,
and converting this into commercial profit. In terms of
raw scientific research, Britain is second only to the US in
production of cited scientific papers, but when converting
research into patents it lies behind America, Japan and
Germany. Britain also lags well behind European levels of
www.ifs.org.uk/fs/articles/0045a.pdf
www.cbi.org.uk/pdf/20090204-cbi-r&d-tax-credit-survey-report.pdf
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