Lord Jones, the former trade minister, will this week warn that British firms are missing out on millions of pounds of EU cash which is available for research and development.
The former head of the CBI will also call on the coalition to do more to help small and medium-sized enterprises (SMEs) by cutting regulation and paperwork, and helping them access the EU's €1.4bn fund for R&D. At a conference organised by Pera, a leading European R&D firm, he will also urge the UK to spend more on R&D – which accounts for just 1.7 per cent of GDP, much lower than the OECD average, and way behind countries such as France or Germany.
He said on Friday: "This country will only get itself out of this economic malaise if we trade our way out of it. It's always the small business sector that pulls the country out – it's where all the jobs will come."
Since the recession, the UK has cut its R&D spending by over a quarter, to £25bn (€28bn). In 2007, before the banking crisis, Germany spent €62bn on R&D, while the UK spent just €37bn.