Research identifies weak link in UK innovation system

Limited support for late-stage development is the weak link in the UK innovation system and curbing benefits to society, finds new research “Increasing R&D investment: business perspectives“.

Senior business decision makers have told the Royal Academy of Engineering that they need more support to take the final step in translating ideas into business success and economic growth.

Research published by the Academy today found that a lack of support in the final development and demonstration stage of innovation is holding back the potential of an otherwise strong innovation system in the UK, compared to other countries such as the US and Germany.

Late-stage development and demonstration is technically challenging and risky but crucial for bringing new products and services to market. At this stage companies demonstrate their technology to potential customers, and test them in purpose-built facilities or real-world situations increasing the probability of successful transition to the marketplace.

The Royal Academy of Engineering’s research found that more support for this stage of development in the UK would encourage further investment in R&D in this country, develop local markets for new technologies and help the UK to become a leader in emerging technologies and sectors.

The government’s Industrial Strategy sets the UK a target of investing 2.4% of GDP in R&D by 2027, with a longer-term goal of 3%, to increase innovation and productivity in the UK. This target cannot be reached without stimulating more business investment in R&D, so through this research the Academy has identified the factors that are influencing decision making on R&D investment into the UK in today’s boardrooms.

Professor Dame Ann Dowling OM DBE FREng FRS, President of the Royal Academy of Engineering said:

“The UK undoubtedly has many attributes that already attract engineering businesses to locate their high quality early-stage R&D activities here, not least our world class academic research base and its excellent collaboration with industry. Unfortunately, this is undermined by gaps in the R&D and innovation system at a highly risky and expensive time in the development cycle. Plugging these gaps would help innovative engineering businesses, boost productivity, and create better jobs and social outcomes in the UK.”

Chief Technology Officers, Chief Executives and Chief Engineers from some the UK’s leading large and small companies took part in the research, which highlights many advantages of locating R&D in the UK, including the UK’s highly-skilled engineering workforce, support mechanisms for early-stage R&D, and a healthy culture of collaboration with universities and between businesses. It also identified other areas for improvement including:

• Driving R&D and innovation in engineering services
• Transforming the unrealised potential of the UK’s public procurement spend to drive innovation
• Breaking sectoral boundaries to accelerate game changing innovation across sectors
• A more joined-up, coherent approach to R&D and innovation support across all government bodies

This report is available on the Academy website as a series of short explainers on the strengths and weaknesses identified through the research, and builds on Engineering an economy that works for all, a 2017 report from the engineering community in response to the government’s Industrial Strategy green paper.

This report, Increasing engineering R&D investment: business perspectives, presents the findings of interviews conducted by the Royal Academy of Engineering with Chief Technology Officers, Chief Engineers, and in some cases, Chief Executives of 31 engineering companies across a range of sectors, sizes and locations, including:

• Anglo American plc
• Babcock plc
• BAE Systems plc
• Blatchford & Sons Ltd
• BOXARR Ltd
• BP plc
• CCm Technologies Ltd
• Electricity North West Ltd
• GreenSpur Renewables Ltd
• Intelligent Ultrasound Ltd
• ITM Power plc
• JCB Ltd
• KENOTEQ Ltd
• Kier Group plc
• Laing O’Rourke plc
• M Squared Lasers Ltd
• McLaren Applied Technologies Ltd
• Mercedes AMG High Performance
• Powertrains Ltd
• Mondelez
• Process Systems Enterprise Ltd
• Quanta Dialysis Technologies Ltd
• Radio Design Ltd
• Ricardo plc
• Rolls Royce plc
• Siemens UK plc
• Surrey Satellite Technology Ltd
• Vivacity Labs Ltd
• Vodafone Group plc
• WSP Group plc

For more information please contact: Victoria Runcie at the Royal Academy of Engineering Tel. 020 7766 0620; email: [email protected]