R&D blow as businesses halt funding

The UK’s research and development capabilities has been badly impacted by COVID to a point where the country’s ability to remain competitive is under threat as is its ability to identify emerging risks.

The vast majority (81%) of businesses that carry out research and innovation work in the UK have reported delays or stoppages to research activities during the pandemic, according to a survey of 500 R&D active businesses published today, by the National Centre for Universities and Business (NCUB).

The new findings, published as part of the new report “Innovation and Resilience in a crisis: The impact of Covid-19 on UK Business R&D”, show that during the Covid-19 pandemic:

  • 81% of businesses reported delays or stoppages to research;
  • 12% of businesses had to stop research activity altogether;
  • 77% of businesses saw delays to product/service demonstration, testing and/or trial production;
  • 96% of businesses reported changes to collaborative projects with universities;
  • A quarter of business respondents noted significantly reduced demand for university collaborations;

It found more than a quarter (28%) of businesses cited insufficient government funding to leverage university collaborations as a key reason for making changes to projects, activities and interactions with universities.

NCUB CEO, Dr Joe Marshall, said: “New data released today shows that the Covid-19 pandemic has had a detrimental effect on businesses’ ability to engage in research and development (R&D) activities in the UK. This is of significant concern now more than ever before. In our changing world, the UK’s research base is key to keeping the UK competitive in global markets and to meeting decarbonisation goals. Covid-19 has affected research and innovation activities, but it is precisely these activities that will be vitally important to our recovery. It is therefore hugely concerning that these new results show that businesses that currently invest in R&D in the UK have suffered significant delays and stoppages to their innovation activity. The pressure for the nation to position itself as a global competitor for further R&D investment has truly never been greater, and this needs to be rectified urgently.”

Marshall continued: “In order to continue to attract investment in UK R&D, the Government must act now to ensure businesses and the entire R&D infrastructure are supported. Experience from the 2008 recession shows that nations that invest in R&D are able to boost productivity, improve livelihoods, and drive forward economic recovery. The UK should be world leading yet, in the last ten years we spent £44 billion less on R&D than we would have if we had invested at the OECD average. The Government have however previously committed to spending £22 billion on R&D in 2024/25 and it is imperative for the nation’s future, that they do not lose sight of this promise.”

Tomas Ulrichsen, Director of the University Commercialisation and Innovation Policy Evidence Unit at the University of Cambridge said: “What is most concerning from the evidence presented in this report is the significant disruption to prototyping, demonstration, testing and trial production as a result of the pandemic. These activities are crucial for converting the ideas and technologies developed through R&D into economic and commercial value that benefits the UK. An effective and coordinated approach from government is urgently needed to support not just R&D but also its translation and commercialisation into economic value.”

Ulrichsen continued: “Also of significant concern is the effect of the pandemic of businesses’ collaborations with universities. Through these collaborations universities have become increasingly important partners in the R&D and innovation process for many companies. However, with financial resources harder to secure to these collaborations; with demand for university collaborations decreasing as businesses focus their attention on surviving the immediate crisis; and with businesses looking for universities to deliver value in the short term, it is clear that universities will have to adapt their approach to working with business to ensure they are able to actively and strategically support the UK innovation system to drive an innovation-led recovery.”