Chris Skidmore was Universities Minister twice between 2018-2020, and is Co-Chair of the All Party Group on Universities and Chair of the Res Publica Lifelong Education Commission. He is MP for Kingswood.
Boris Johnson knows that narratives matter. Levelling up, taking back control, building back better may seem slogans, but they point to a vision of a post-Brexit Britain that is free to renew itself for the 21st century.
Central to that vision is also the UK as a “global science superpower”, a phrase first coined by the Prime Minister in 2019, yet which now has more than a ring of truth in its utterance when we look at the UK’s commitment to investing in research to uncover a Covid vaccine, and as a result to continue to lead the world in its vaccination programme.
It’s clear from his arrival for this weekend’s G7 meeting in Cornwall that the vision of Britain as a global centre for science and technology remains undimmed. The Prime Minister chose to showcase the UK’s future horizontal space launch site at Newquay on his arrival in Cornwall— made possible thanks to a multi-million pound government investment in partnership with Virgin Orbit, in a few years’ time, space launch into low earth orbit will be a reality, and along with vertical launch sites at Sutherland and the Shetlands, promises to give the UK the first launch base in Europe.
Yet when it comes to overall spending on science, research and innovation, if we look at the other countries attending the G7, and compare the UK’s current investment, both in terms of total investment but also as a proportion of GDP, we need lift off soon.
Currently the UK spends around 1.7 per cent of its GDP on R&D. Yet the US and China are heading towards three per cent GDP, Japan spends 3.2 per cent, Germany is planning to reach four per cent. Only Italy and Canada are behind the UK in terms of R&D investment in the G7. Outside of this group, other countries are pushing even faster still. South Korea is already at 4.5 per cent and Israel higher still at 4.9 per cent.
Of course the Government has committed to spend 2.4 per cent GDP by 2027 on R&D — what was the OECD average back in 2017 — indeed the recent government commitment to double public R&D spending to £22 billion by 2024/25 has certainly given the commitment a boost. Yet by the time we reach July 13 in a few weeks time, 2027 is just 2,000 days away. Four years have so far past, with R&D activity having only risen around 0.2 per cent of GDP in this period. With five and a half years to go, we cannot afford to continue on the same trajectory. Even the OECD average that was the benchmark for the 2.4 per cent strategy has risen to probably over 2.6 per cent.
We only need to look ahead at the pack pulling ahead in this global technological race. Joe Biden has already placed research and innovation at the centre of his “building back better” strategy. In March 2021, The White House announced that as a part of its American Jobs Plan, it was requesting Congress to authorise $180 billion in federal investment designed to advance US leadership in critical technologies and American research.
It’s clear why R&D is the industry of choice. According to a 2020 report by Breakthrough Energy on the Impacts of Federal R&D Investment on the US Economy, if the federal government were to increase its investment into R&D to at least one per cent of GDP by 2030, then that investment would support 3.4 million jobs. Additionally, this continued investment would be projected to add $478 billion in activity to the American economy with a projected $81 billion in tax revenue windfall.
As the United States seeks to increase its investment into innovations driven by R&D, the German government has also pledged to both increase its tax allowance for companies investing in research, but also increase its central funding to the tune of €2.5 billion. This investment is specifically designed to target funding for electricity mobility, battery cell production and safe charging infrastructure. Additionally, the German government has announced that it was looking to provide a €1 billion bonus programme targeting “forward-thinking” manufacturers and suppliers, specifically in the automotive industry. In 2018 alone, the German government invested the staggering sum of €105 billion into R&D.
Elsewhere, China also announced a serious increase in R&D investment during the Fourth Plenary Session of the 13th National People’s Congress in March 2021. The announcement that it will be increasing investment in R&D by more than seven per cent every year over this Five-Year Plan, with expenditure on basic research rising by 10.6 per cent in 2021 alone. These investments are yet another signal that China is seeking to dramatically increase its domestic technologies such as for example artificial intelligence, quantum information, semiconductors, biotechnology and deep space capabilities, most of which are currently dependent on international suppliers.
In the wake of the pandemic, with many economies and sectors seeking to innovate and change their working practices, to reform their business, now is the time to double down on R&D investment, especially when we recognise where the rest of the world is heading. Even I have come to doubt whether 2.4 per cent, the OECD average at the present time, will be sufficient for the scale of change that is coming in the 2020s and into the 2030s.
The success of “Global Britain” now depends on matching countries that have transformed their economies towards innovation and research. I would now go further— and suggest if we wish to keep up with our G7 colleagues, the forthcoming Innovation Strategy should set a definite timetable for three per cent, and beyond to 3.5 per cent of GDP being spent on R&D. To fail to achieve this in contrast to the other major world economies be setting ourselves up to fail.