Investing in ideas: why supporting university research and development matters

Breakthroughs that led to technology that we benefit from every day - like fibre broadband, the COVID-19 vaccine and the television - were all developed by researchers at UK universities. But our status as a world leader is at risk without sustainable investment in R&D, particularly blue-skies discovery research.

Excellent university research is happening in every part of the UK – over 80% was classified as ‘world-leading’ or ‘internationally excellent.’ It is also a powerful driver of economic growth: for every £1 invested in university research and innovation, the UK gets £10 back.  

Public investment in R&D plays a crucial role in attracting private investment, with every £1 of public funding generating between £3.09 and £4.02 in private R&D funding over the long term. Notably, around 60% of the impact is seen within the first 3 years. Research commissioned by DSIT highlights the important role of public R&D to support the government’s growth mission, showing that the returns to public R&D have increased since the financial crisis. In 2021-22, the total estimated productivity spillover from university research was £40.1bn. 

The UK’s universities have a unique strength to conduct fundamental research: this trailblazing and experimental research leads to new discoveries, technologies, and ultimately products, businesses, and jobs. It also fuels entire industries, from life sciences and clean energy to AI and advanced manufacturing. The UK is a global leader in fundamental research excellence. Our competitive advantage in fundamental research underpins the success of, amongst others, the UK’s technology sector, which is worth over one trillion dollars, behind only the US and China.  

This research activity at universities directly supports the delivery of government missions. In 2022–23, clinical medicine R&D in UK universities received £2.5 billion of research income, while research income for nursing and related fields totalled £108 million, supporting the future of the NHS. £144 million of grants were received for economics and business management research.

Universities play an active part in kickstarting economic growth through their innovation and commercialisation activities: in 2021, investment into university spinouts reached £5.3 billion, and since 2019 more than 20,000 active spinouts, start-ups and social enterprises have emerged from UK universities. Public attitudes research from the Campaign for Science and Engineering (CaSE) found 72% thought the government should use R&D as a tool to achieve its missions.

The higher education sector itself is also the second-largest investor when it comes to R&D in the UK. Across all eight of the growth-enabling sectors identified in the Industrial Strategy Green Paper, university research plays an important role. For example, the UK is home to 4 of the top 10 global universities for life sciences and medicine.

The UK’s research strength is, at least in part, linked to the way its funding is allocated. Quality-related research (QR) funding and its equivalents in Scotland, Wales, and Northern Ireland are one half of the dual funding system of research where flexible, longer-term funding complements a grant-based approach. It is a unique, and particularly vital, funding stream for universities because it is not protected for specific activities. This flexibility enables universities to make strategic decisions according to their missions and objectives and increases agility with the programmes they fund. It allows universities to invest in areas of research potential for the future, seed the development of new areas of research and new collaborations, and fund the training of the future R&D workforce.  

This funding stream is awarded in line with universities’ research excellence, helping ensure that the highest-quality research continues to be found across every part of the UK. It also means that universities with a proven track record in research can continue to perform the most novel and innovative work. A study from the last decade examining five high-research productivity countries found that those allocating more resources through QR-like mechanisms spent less public money per citation and publication. 

Figure 1: Decrease in recurrent quality-related research funding, (2010−11 to 2023−24) (CPI, AY 2010−11)

However, as figure 1 illustrates, since 2010 this kind of research funding has fallen by around 15% in real terms across the UK, especially in the devolved nations.

As QR funding has declined, universities have mostly made up for it by increasing international student fee income. But with that now under pressure too, it’s getting harder for universities to weigh up their options when it comes to co-investment.  

The result of this real-terms decline in funding threatens the agility, innovation, and long-term planning that QR facilitates for university research. In turn, this threatens our world-leading sector’s capacity to contribute to government ambitions and improve everyday lives. That is why we are calling for a sustained real-terms increase in QR funding from the upcoming Comprehensive Spending Review. This is a critical time for the research system in the UK. It can, and must, make a significant contribution to our economic performance – but we have to be sure to balance today’s innovations with the fundamental research which will lead to tomorrow’s game-changing discoveries.  

The UK has long been a global leader in research, driving innovation and advancing knowledge across disciplines.  One key measure of this impact is scholarly output - the wealth of published research produced by UK research performing organisations: with just 4% of the world’s researchers and less than 1% of the global population, the UK has the third largest share of the world’s academic publications (6.3%) and an even larger share of the world’s most highly cited publications (13.4%). While no single metric can fully capture the depth of research excellence, scholarly output provides a compelling view of the UK’s contribution to the global research landscape. 

At the heart of this success are the UK’s universities - world-class institutions that serve as engines of discovery, innovation, and collaboration. Through cutting-edge research, interdisciplinary partnerships, and a commitment to pushing the boundaries of knowledge, UK universities play a pivotal role in securing the nation’s position as a leading hub for research excellence.  

This data release from Elsevier highlights the volume, quality, and collaboration of UK research.