The golden thread

JonMendelsohn.jpgJon Mendelsohn on the urgent need to put science and innovation at the heart of the UK’s industrial strategy

Science, research and innovation play a fundamental role in the success of the UK economy. Our scientific research base in particular is a global force. Our universities generate work of quality and influence far beyond competitors of similar populations and funding. The UK is responsible for more cited research papers and more Nobel Prizes than any country outside the US. And we lead the world in sectors from genetics to robotics.

But the outlook for UK science is precarious. Membership of the EU has given us a platform from which we have excelled. Brexit will provide new opportunities but the risks are significant. Managing all of this is not just be about plugging a funding gap – although that will be crucial given the UK receives more R&D funds from the EU than we put in. It is also about maintaining and enhancing the intensive level of international collaboration (facilitated in large part now by the EU) that is increasingly a prerequisite for world-class scientific research.

More than half of the UK's research output is internationally co-authored, and seven of our top 10 strongest collaborators are EU nations. We risk losing the benefits of 20 bilateral science and technology agreements between the EU and the likes of Brazil, Japan and the United States. And then there’s dampening of the flow of world-class researchers, engineers and developers to and from the UK – vital not just for academic research but for our most innovative businesses and, crucially, public services.

Leaving the EU will require an immense effort to maintain such international collaboration, and an even greater effort to get ahead of the game. But that must be the aim. As the government has belatedly realised, we already have some way to go in terms of investment in innovation. At 1.7% of GDP, the UK’s total spend on R&D is stuck below the OECD average of 2.4% and even further behind South Korea, Japan and Sweden, all of which are over 3%. 

Worryingly, we are already experiencing a slowdown in R&D. The Office for Budget Responsibility recently revised its figures down to show a 2.5% fall in business investment in the year before the EU referendum, after which the outlook has worsened still. Business investment today remains just 5% above its pre-crisis peak, almost a decade ago. At the same point after the 1980s and 1990s recessions, investment was respectively 63% and 30% higher than the pre-recession peaks. All of this is closely linked to our sluggish productivity performance which, measured by output per hour, was this year just 0.9% higher than a decade ago according to the Bank of England. The worst result for 200 years.

A clear, ambitious plan to boost science and innovation is urgently needed if we are to revive our productivity and economic growth. The House of Lords Science and Technology Committee has been instrumental in pushing that case forward, and the Committee’s new chair, Lord Patel, is leading a timely parliamentary debate this week on how the government plans to make science and innovation an effective part of its industrial strategy. 

At present, the UK is desperately lacking such a plan, following a government green paper which the Committee said resembled “more of a portfolio of tactics rather than a coherent strategy”. We need instead clear, measurable objectives; a discernible roadmap for reaching these in collaboration with industry; and transparent lines of accountability. The government's approach is sorely lacking on all fronts. We have a great opportunity for our world-leading science and innovation base to act as a golden thread, weaving together an ambitious new national industrial strategy. An opportunity that must be grasped if we are to avoid a more threadbare future.

Lord Jon Mendelsohn is Shadow Minister for Business, Energy & Industrial Strategy and Shadow Minister for International Trade in the House of Lords 

Published 22nd October 2017

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