OECD: UK receives lowest level of R&D support than any other economy

OECD: UK receives lowest level of R&D support than any other
economy


Britain's small and medium-sized firms receive the lowest level of
government support for R&D funding than any major economy, an analysis by
the Organisation for Economic Co-operation and Development has revealed.








Britain receives the lowest
level of R&D funding support compared to any other major economy, an OECD
analysis reveals. Photo:
Alamy






By Louisa Peacock

3:36PM GMT 07 Feb 2013


98 Comments




The lack of taxpayer support over the past decade may have “eroded” Britain’s
competitive edge, given that R&D capital is seen as one of the major drivers
of economic productivity, the OECD said.


The study, based on spending figures from 2008-9, shows the UK ranks last for
funding support out of all 27 OECD countries, including America, France and
Germany.


British firms with fewer than 50 employees fare the worst, while those with
between 50 and 249 workers attract only marginally more support, according to
the report.


The OECD said that indirect government support, such as through R&D tax
incentives, ranks higher than America, but it is still way below that of Canada
and France.


The OECD said the decline in R&D spending in Britain is largely
“historical”. The share of R&D expenditure in output fell from around 2.2pc
in 1985 to 1.8pc in 2010, with both public and business R&D contributing to
the decrease.



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Since 2009, the coalition Government has taken steps to increase support for
R&D by small firms, including increasing the rate of relief under the tax
credit scheme to 225pc from last April; one the of the most competitive rates in
the world. It has also ring-fenced the £4.6bn annual science and research budget
amid austerity cuts.

But, the OECD report said: “There are concerns that the failure to maintain
and expand the research capacity over this period at the same rate as elsewhere
may have eroded the United Kingdom’s competitive edge.

"The United Kingdom may find it more difficult to take a leading role in the
next product innovation cycle.”