The UK’s research and innovation system is at a crossroads. If we want to be a country of the future rather than the past, we must double down on our ambition to be genuinely world leading in research and innovation.
Chapter summary
This chapter argues that the UK is at a crossroads in our ambition to be genuinely world-leading in research and innovation. We can no longer take UK universities’ research and development (R&D) activities for granted.
Universities face intensifying financial pressure and rapidly increasing global competition. The current system relies on a disproportionate and growing cross-subsidy from universities to make research viable. The 'stop-start' nature of government funding creates abrupt breaks in projects. This prevents the development of infrastructure and expertise, and disincentivises research across disciplines and collaboration with industry. For the UK to retain its international competitiveness and deliver on the government’s economic growth ambitions, it requires a stable and sustainable approach to R&D.
Our recommendations
Funders should review incentives and requirements that demand in-kind or matched contributions to research grants and other mechanisms, so that universities are not expected to contribute more than 20% of the costs of research.
The government should provide a sustained real-terms increase in Quality Related funding and an additional uplift in the Charitable Research Support Fund in line with charitable investment.
Universities shouldaim for closer to 100% cost recovery for industry-sponsored research, unless engaging with small or emerging businesses.
The government shouldset an ambitious GDP based R&D intensity target, covering both public and private investment, to match that of the most competitive and innovative countries in the world.
The government shouldcreate a Missions Innovation Fund, in addition to the existing research budget, to stimulate research and innovation orientated towards addressing the priorities set out in the government’s Missions and its Industrial Strategy.
Universities shouldbuild in strategies to mobilise their own and/or venture capital to support the commercialisation of research, IP and scaling up of university spin-outs.
The British Business Bank has the potential to scale up funding and further mobilise capital through a dedicated spin-out venture capital fund.
There is a crisis in university research funding and we risk seeing the UK’s world-class capabilities and competitive advantages being eroded. We cannot afford this. A high innovation economy in the UK must match the research intensity and successful commercialisation of our strongest competitors.
Universities must meet the government halfway. We need universities to engage in research and innovation in line with their strengths and build critical mass in major areas of scientific discovery, while ensuring cross-pollination between disciplines.
