Britain fails the research test

Government figures confirm that our companies are not investing enough. Roger Trapp reports

IN recent years there has been no shortage of soul searching among industrialists and policy makers about Britain's declining competitiveness.

One of the reasons for this was that even as the Conservative government was pushing forward the notion of Britain as the enterprise centre of Europe, evidence was mounting of a widespread failure to invest in the things that would create long-term prosperity rather than short-term shareholder gains.

Last week more material arrived to reinforce that view. The latest official figures show Britain falling further behind international competitors in corporate research and development.

According to the Department of Trade and Industry's UK R&D Scoreboard, although expenditure has increased, it still accounts for a smaller proportion of sales than in other G7 countries. Along with Italy, the UK spends 2.3 per cent of sales on R&D, while Japan, Germany, the United States and France all devote more than 4 per cent of turnover to it.

The top UK companies have increased spending at a similar rate to leading international companies in recent years. But in percentage terms they are only spending about half as much as these international peers, putting the UK corporate sector at the bottom of the league table of R&D intensity, says David Tonkin, the managing director of Company Reporting, the corporate monitoring organisation that compiled the tables.

Certainly, there are bright spots. Glaxo Wellcome, the pharmaceuticals group that tops the tables just ahead of SmithKline Beecham and Zeneca with a total R&D spend of pounds 1.16bn, is also the world's number one investor in this area.

Moreover, certain UK organisations, such as Siebe, arguably Britain's most successful engineering group, and Reuters, have invested a much greater proportion of revenues than the national average.

There are also some findings that confound conventional thinking. For instance, General Electric Company is traditionally thought of as a low spender on R&D, but according to the rankings it spends just under 7 per cent of sales on it, while BT is reckoned to be betting huge amounts on the future, yet is accorded an R&D intensity rating of only 2 per cent, even though its total spend of pounds 282m puts it in eighth place.

The findings of this seventh annual review are serious enough to lead John Battle, the energy and industry minister, to say in the report that under-investment by companies "could have serious implications for the long term and the crucial question must be what then is their strategy for achieving and more importantly sustaining success in the long term? Without more dynamic firms our whole economy's future is in jeopardy".

Coming on the heels of a CBI/NatWest survey showing that manufacturers are spending less on innovation (which is deemed to include training and marketing as well as straightforward R&D) this does not make for comforting reading. And it may be that Gordon Brown, the Chancellor, will use his first Budget to do something to ease the situation.

There is, however, a growing view that, except at the level of the smallest companies, governments should do no more than create the right environment. It is up to companies to set priorities correctly.

Advice on what they should do came earlier this month in a speech given by Steve Woolgar, director of the Centre for Research into Innovation, Culture and Technology (CRICT).

Among the recommendations in his 3M Innovation Lecture at Brunel University, Professor Woolgar called on organisations to beware linear thinking, to remember that many people are resistant to innovation as a result of fear of change, to realise that innovation is a social process and to encourage "intellectual promiscuity".

He said: "We need to promote greater interaction across the boundaries between government, industry and academia, preferably to the extent that we can comfortably disown the constraints of these categories."

Suggested Topics
News
Alan Bennett has criticised the “repellent” reality shows which dominate our screens
tvBut he does like Stewart Lee
Life and Style
The Google Doodle celebrating the start of the first day of autumn, 2014.
tech
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Sport
David Moyes and Louis van Gaal
football
PROMOTED VIDEO
News
i100
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
News
Former Governor of Alaska Sarah Palin, left, with her daughter, Bristol
newsShe's 'proud' of eldest daughter, who 'punched host in the face'
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
Arts and Entertainment
Salmond told a Scottish television chat show in 2001that he would also sit in front of a mirror and say things like,
tvCelebrity Trekkies from Alex Salmond to Barack Obama
Life and Style
Carol O'Brien, whose son Rob suffered many years of depression
healthOne mother's story of how London charity Maytree helped her son with his depression
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
Life and Style
food + drink
News
Rob Merrick's Lobby Journalists were playing Ed Balls' Labour Party MPs. The match is an annual event which takes place ahead of the opening of the party conference
newsRob Merrick insistes 'Ed will be hurting much more than me'
News
A cabin crew member photographed the devastation after one flight
news
Voices
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits