New UKRI targets for industry-funded research ‘challenging’

“Ambitious” plans to use research funding to attract industry investment of £25 billion by the end of the decade are likely to prove “extremely challenging” given falling levels of university-business spending, experts have warned.

Unveiling funding reforms last month, UK Research and Innovation (UKRI) announced it will spend £8.4 billion on research focused on “strategic government and societal priorities” over the next four years and outlined allocations for each of the eight “high-growth Modern Industrial Strategy sectors” where this money will be spent.

Of these priority areas, artificial intelligence is earmarked £1.1 billion in funding up to 2029-30, life sciences awarded just over £1 billion and quantum technologies, advanced manufacturing and creative industry-related research handed significant sums.

That approach aligns with science minister Patrick Vallance’s “three buckets” model of research funding which ringfences money for curiosity-driven research (awarded £14.5 billion over the spending review period ending in 2029-30), while increasing funds for applied areas related to Labour’s industrial strategy – with the expectation of greater industry co-investment in research.

Science secretary Liz Kendall has also backed this approach, telling a parliamentary committee in December that the UK’s scientific success could be judged, in part, on how much industry spent in high-innovation sectors, referencing Tom Cruise’s catchphrase “show me the money” from the 1996 film Jerry Maguire.

There are, however, concerns that UKRI’s aspirations to leverage private research spending using industrial strategy-facing funds may be unrealistic. Echoing comments made by Patrick Vallance, UKRI’s budget explainer said the industrial strategy research investments will “target at least, on average, £3 of private investment for every £1 of public investment, and more than this when investing to support innovative companies” – the latter funding stream referring to the £7.4 billion awarded to “supporting innovative companies”, an activity led by Innovate UK.

Achieving that ratio of match-funding would turn UKRI’s £8.4 billion for this type of research funding into an overall public-private portfolio exceeding £30 billion within four years yet it was unclear whether industry was keen to stump up such sums, said Graeme Reid, professor of science policy at UCL, who nonetheless applauded the funder’s desire to increase business spending on research.

“This isn’t a bad ambition but it’s a very big one – has UKRI tested industry’s appetite for committing this level of private investment into research?” said Reid, noting that this ambition for massively increasing private research spending “depends on the readiness of private investors to join the party and produce a significant sum of money over a four-year time frame”.

That willingness to co-invest in UKRI research plans could prove difficult given recent reports that UK business investment in R&D has fallen by 6 per cent since 2021, while university income from business had also stalled, said Reid. Last month the National Centre for Universities and Business’ State of the Relationship 2025 report revealed income from university-business collaboration was down 2.1 per cent in real terms.

“To achieve £3 of private funding for every pound spent by UKRI represents a high ratio, even for the ‘supporting innovative companies’ category, so there is a question over what happens if the private sector simply chooses not to participate at this scale over the time frame,” added Reid.

With pressure to partner with industry on research projects, UKRI may risk “drifting from its mission [of supporting excellent research] and start doing things that might be better left to the private sector”, he added.

However, Joe Marshall, chief executive of the NCUB, welcomed the 3:1 ambition, stating it “sends a very positive signal about the government’s ambition that every pound invested will seek to leverage private spending”.

“It’s more a signal of intent,” continued Marshall, saying it was unlikely that researchers would be forced to achieve the 3:1 ratio when applying for this type of industrial strategy-focused funding.

“I’m not expecting academics to have to entirely reorientate their research in terms of meeting industry needs,” he added on how this might affect researcher behaviour, noting that the “UK university system is already quite attuned to industry…and big businesses are very interested in the cutting-edge research in UK universities”.

However, John Womersley, a former executive chair of the Science and Technology Facilities Council, said the ambition to attract more industry funding could start to influence what was funded.

“Achieving this kind of leveraging will be extremely challenging for the kind of work that the research councils have traditionally funded,” he said, noting that “securing even 1:1 matching from business for university-type, low-translation research takes work”.

“Innovate UK clearly has more experience and a better understanding of how to deliver on this target, but 3:1 seems extremely ambitious in any context,” he added.

jack.grove@timeshighereducation.com