R&D spending drops 10%

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BUSINESS spending on research and development fell by 10 per cent in 1991 after allowing for inflation, government figures showed yesterday. The fall was particularly sharp in the defence sector.

The Central Statistical Office figures, which are often taken as an indicator of the longer-term health of British industry, suggest that civilian R&D by business has not fallen as much as some feared during the recession.

In cash terms, there was a fall from pounds 6.34bn in 1990 to pounds 6.3bn in 1991. This was a decline of some 6.8 per cent in real terms.

Total spending on R&D by business, government, universities and non-profit organisations dropped from pounds 12bn in 1990 to pounds 11.9bn in 1991, also a decline of 6.8 per cent in real terms. R&D's share of national output, which was also dropping in 1991, shrank from 2.2 per cent to 2.1 per cent.

The latest international comparisons show that Britain ranks in the middle of countries by total R&D. In 1990, Japan spent 2.88 per cent of national output on R&D; Germany 2.81 per cent; the US 2.8 per cent; France 2.4 per cent; Canada 1.38 per cent and Italy 1.35 per cent.