New prime minister must up R&D funding or risk ushering in ‘low skilled’ economy
The next prime minister must up the UK’s spending on science research and development (R&D) or risk losing its standing as a global leader, Tory-backed think tank Onward has urged today.
In a report, supported by several MPs including former science minister George Freeman, Onward said the lack of spending risks damaging the UK’s core products, such as pharmaceuticals.
Since 2010, the UK’s pharma exports have fallen from 4th highest in the world to 98th and a $9.7bn (£7.9bn) trade surplus has turned into a $1bn trade deficit (£821m), MPs noted.
“Unless there is proper plan, we’ll end up going down the route of manufacturing and we’ll lose that ability as well,” CEO of British semiconductor firm Paragraf, Simon Thomas, told City PM
Many companies in the UK have transferred their manufacturing process overseas for both skill and costs purposes, something which Paragraf has so-far resisted as it works with the government to overhaul its support scheme for local tech firms.
“Our product is innovation and if you don’t support that product and get that product out into the world, then the country just becomes a service industry,” Thomas said, warning that the economy would “eventually end up in situation where most of the jobs are low skilled, low pay.”
The UK’s late-stage funding is essentially non-existent, Thomas explained, which means many companies are left “stuck in no man’s land” and are eventually pushed overseas.
Craig Gulliford, CEO of London-listed healthcare device manufacturer Creo Medical, added that government investment into R&D is critical for the economy, as well as solving some of the country’s core issues such as the NHS backlog.
“At Creo, we have benefitted, directly and indirectly, from government investment, and our innovative UK developed electro-surgical devices are now helping tackle the NHS backlog, and are being rolled out globally,” he told City PM “So, it’s absolutely imperative that the government prioritises investment into this space post-Brexit.”
Beyond public health, properly funding R&D will also form part of the UK’s efforts towards decarbonisation, to ensure the country meets its pledge of net zero by 2050, founder and CEO of London-based Satellite Vu, Anthony Baker explained.
“The UK must strive to be a leader in this area,” Baker said. “These world leading technologies, mastered in the UK, will only be furthered by government-led backing.”
A spokesperson for Conservative leader candidate Rishi Sunak said that “business investment, including R&D, is profoundly important” and that his government would fund it through tax reliefs and capital allowances, “rather than persisting with the failed orthodoxy of cutting the corporation tax rate for big business.”
City PM has contacted Liz Truss’ campaign for comment.