The race for the technology of the future: why university research needs a long-term funding strategy

At this point, it’s a cliché to say that the UK’s higher education sector punches above its weight. But like many clichés, it happens to be true: although the UK’s economy ranks only as the 6th largest in the world, the UK ranks third in terms of both the sheer volume and quality of research papers published. Only the two global superpowers, the US and China, rank above the UK in terms of research volume and quality.

In an increasingly competitive and uncertain world, the fact that the UK’s universities and broader R&D sector are genuinely world-leading is a significant competitive advantage. Both the Conservatives and Labour recognise this in their Science and Technology Framework and Industrial Strategy.

These visions identify some of the key technologies and industries that are set to become the major drivers of economic growth and social change in the world over the coming decade. They are also areas where the UK is unambiguously a leader:

• Artificial intelligence: UK ranks 3rd in AI research, and university researchers are currently using AI to help Rolls Royce develop new jet engines, design wind turbines that are 30% more efficient, and discover new drugs for the pharmaceutical industry.
• Life sciences: The Oxford-AstraZeneca vaccine is a case-in-point on how having national, UK capacity on core technologies of the future is a strategic asset during national emergencies. The vaccine saved 6.3 million lives in the first year of rollout.
• Net zero: The UK renewables market is estimated to be worth £23bn. Plymouth University provides cutting-edge practical research and consultancy facilities for offshore energy developers.

The large language models that underpin ChatGPT were designed by computer scientists at universities, and the Oxford-AstraZeneca Covid vaccine was built on Oxford University researchers’ work on exotic diseases. These trailblazing and experimental initiatives that drive discovery and innovation forward only really happen at universities. That’s why businesses like Rolls Royce, Google, and AstraZeneca, are keen to partner with universities. These collaborations contribute to the UK’s technology sector being worth over one trillion dollars.

For the past six months, UUK has been speaking to researchers, businesses, and thought leaders in the R&D space. What has emerged from these conversations is a clear need for the UK to form a long-term and strategic approach to R&D investment if it is to retain its technological edge.

This is why we are proposing that the government treat R&D as long-term capital investment through 10-year funding cycles, as opposed to the current cycle determined by the short-term Comprehensive Spending Reviews. We believe that this can help enhance the UK R&D sector’s strengths, as well as address its weak points in the following ways:

• Stability for investors and businesses to collaborate with universities: Businesses and investors need long-term stability for projects and personnel to be worth the investment. Under the current system, universities recruit, train, and build teams, only to disband them again every few years. Longer funding cycles create more stable teams that can collaborate with businesses and reassure investors. 

• More impactful and cutting-edge research: Research projects can span decades. Once lost, R&D talent and capacity require time to re-build, allowing the UK’s competitor countries to jump ahead. Discussions with universities indicate that they primarily use flexible funding to drive the economic and real-world impact of their research.
• Cutting red tape and reducing bureaucracy: Recruiting and training people, setting up labs, contracts, building a skilled team, and finding research partners takes time. Longer funding cycles mean less time spent on admin and more time spent on R&D.
• Building up and retaining top talent: To invest in and properly support promising young researchers for long-term fellowships, it is critical to have the knowledge that the fellows will remain in post for five years rather than one or two. Avoiding high staff turnover also facilitates the flow of talent between academia and business.

• Flexibility:10-year funding cycles will see the emergence of new technologies and growth areas. While funding and opportunity spaces can be pre-defined, they should be agile enough to able to pivot to capitalise on new opportunities and emerging talent.
• Rolling visibility over future funding cycles: In the current system, when universities and funders reach the final year of the funding cycle, they do not know what a future settlement will look like. This creates disruption and uncertainty that sees researchers and business collaborators leave.

• Have researcher talent and development at its core: It is skilled researchers, technicians and staff who operate the laboratories, supercomputers, and large-scale databases that enable research. To attract and retain top talent, we need to embed career development and more secure contracts into R&D programmes. 
• A strategic mix of capital and revenue funding: Currently, capital and up-front investment funds are slightly privileged over revenue funding. Revenue funding for things like skilled technicians, maintenance, and supporting infrastructure is critical to fully exploit the productivity of research projects.

The UK comes from a position of strength: it holds a first-mover advantage both in the quality and volume of its research as well as key technologies of the future, such as AI, quantum, and the life sciences. But it cannot rest on its laurels.

We encourage UK leaders to build on this strength and cement the UK’s position as a science and technology superpower for the future by signing up to long-term, strategic 10-year funding cycles. The future of UK R&D, as well as the wellbeing of our communities and economy, depends on it.