Cutbacks in research funding may cost the British economy dearly

The UK's first-class knowledge economy will be consigned to second-class status if the axe is wielded too savagely, Steve Smith warns

August 19, 2010

The Prime Minister made clear in his recent speeches in both the US and India that the UK has to focus on winning business for British industry, including attracting inward investment into the country. Similarly, the government's strategy for growth, published the day before David Cameron's US visit, stressed the importance of the UK research base in attracting this investment. In short, any strategy for the nation's future economic growth has to be based on winning what Lord Sainsbury called "the race to the top", not a race to the bottom in terms of wages.

The problem, of course, is that the UK research base is threatened with reductions in public investment, despite existing levels being modest by comparison with rival economies. The UK spends about 1.79 per cent of its gross domestic product on research and development (public and private). This compares badly with Germany (2.54 per cent), Japan (3.40 per cent), South Korea (3.00 per cent), Taiwan (2.77 per cent) and the US (2.68 per cent). Even though China currently spends 1.44 per cent of its GDP on R&D, the growth rate there is significant, whereas spending in the UK and the US has remained more or less level for a number of years. Yet for this modest investment, the UK gets very good results.

The UK Trade & Investment report, Inward Investment 2009/2010, published last month, shows that Britain continues "to be ranked independently as having the strongest research base in Europe and the second-strongest in the world (behind only the US)". For example, the UK produces 14.1 per cent of the most highly cited 1 per cent of research papers - second to the US overall, but ahead in the clinical sciences, health sciences, biological sciences and environmental sciences.

This has led to major inward investment, showing clearly the advantages of having a world-class research base. One example cited by the UKTI report is that "overseas entities own 37 per cent of patents in the UK, compared with just 11.2 per cent in the US and just 4.4 per cent in Japan". To improve this trend, UKTI stresses the attraction of Britain's R&D base.

Universities are part of this major national asset, and our concern has to be that reducing public support for the research base will cause not just lasting damage to the future growth strategy of the UK government, but quite possibly permanent damage.

Research is a long-term endeavour, requiring significant commitment and investment in people and infrastructure to sustain world-class capacity and capability. If cutbacks in science and research spending rise above a relatively small sum, then the only options are to move out of research in specific areas, despite the fact that they may be of critical importance in the long term. Cutbacks of more than single percentage figures will mean looking hard at the UK's involvement in some major international scientific collaborations.

Thus, for example, pulling out of Cern, or withdrawing from other major international projects, would have one very specific effect: once we stop participating in these projects, we will lose the capacity to re-engage quickly. In effect, we would be pulling out of entire areas for a generation.

Of course, every area of public spending will make its case in the government's forthcoming Comprehensive Spending Review, but there will be profound effects on the nation's future growth strategy were research and science to be cut significantly. It really would lead to a drought, since these are not taps that can be turned on and off as budgetary pressures come and go.

In this sense, whereas some areas of public spending can take a year or two of temporary reductions, the research base cannot. There is some evidence that we're beginning to see a brain drain of the UK's research stars. This is because in contrast to the impending cuts to Britain's science and research base, other countries are doing the exact opposite.

Here is just a selection: the US is doubling its basic science spending to 2016, with a 6 per cent increase in 2011; Germany is spending an additional €18bn (£15bn) on science, research and development for 2010-15; China is witnessing a 25 per cent increase in central government funding to the science and technology sector; in France, research and the academy are to receive an additional €1.8bn per year (2010-11), of which research will receive €804m.

The decisions we make now will affect our ability to compete on the global stage and will be difficult (and costly) to reverse. Avoiding this is not just about continuing to be a world leader, important as this is. The success of our science base is tied to our future economic growth and attractiveness to potential investors. The big danger is that we inadvertently relegate the UK to becoming a second- rather than a first-class knowledge economy.

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