The UK government has recently set an ambitious target of spending 2.4% of GDP on research and development by 2027. Alas, a new report from the Confederation of British Industry (CBI) suggests that at the current rate, this mark won’t be reached until 2053, which would represents an overshoot of some 26 years!
The report reveals that much of the global growth in R&D expenditure is being driven by computing, as the share of R&D spending on products fell to 41% by 2015, with a further fall to 37% expected by 2020. By contrast, investment in sofware and services-based research grew to 59% by 2015, with this predicted to reach 63% by 2020.
The complexity of modern R&D often means that companies need to be creative to ensure they have the talent they need. This requires collaborative innovation strategies, such as open innovation, that require engagement with a range of external sources to ensure the company has the right ideas, talent and knowledge available to them.
“Interactions between industry and universities continue to rise, with some businesses developing a network of long-term strategic research partnerships,” the authors explain. “Corporate venture capital investment is on the increase, with global funding up by 47% in 2018 and the number of deals up by 32%.”
Data-driven R&D
A particular focus of the report is on data-driven R&D, and while the UK does have many businesses that are leading the way in the utilization of data for research and innovation purposes, these businesses still represent a minority, with many more falling into the category of data novices. This is generally not for a lack of awareness, but rather a lack of capabilities that sees under 10% of British businesses even using some form of CRM system. Just 4% of businesses report having the right skills and tools to make use of whatever data they have.
Addressing this skills shortage is a key first step therefore, but collaboration is increasingly required to maximise the value of data. Indeed, this can be invaluable in overcoming any skills shortages you face as an organization.
“Businesses are increasingly approaching universities to help them unlock the potential value of their data for product and service development,” the report says. “However, businesses can find knowing where to start, and how to navigate a new and complex landscape challenging.”
Making improvements
To improve matters, the report makes a number of recommendations, including the establishment of a roadmap that has clear commitments to raise public funding in R&D, steps to make it easier for businesses to navigate the state support available and heavily investing in skills development to increase the availability of high-level data and analytics skills.
“The Government must speed up its effort to hit the 2.4% target or the UK is at risk of falling further behind. Advanced data analytics are opening up a new frontier for UK R&D, to ensure we benefit we must have a comprehensive roadmap underpinned by a boost in public funding to spur growth in UK R&D investment,” the CBI conclude. “If the UK is to reap the benefits of the data revolution the Government’s roadmap must ensure that the R&D tax credit is modernised, that businesses are able to collaborate with universities on data, and simplify access to innovation support through a ‘one-stop’ shop.”
