In 2017, companies in the EU increased R&D expenditure for the 8^th consecutive year.

EU businesses invested 5.5% more in R&D activities than in 2016, but with less growth than that of US companies (9% more) and Chinese companies (20% more). This growth was primarily driven by expenditure in the automotive, health and ICT sectors.

The UK, Germany and France contribute to two thirds of both total R&D and total sales of the top 1000 R&D investors in the EU

The UK and Germany each have 135 companies in the world’s top R&D investors, whilst France has 75.

Although the UK and Germany have equal numbers of companies in the top 1000, the UK’s percentage of world R&D share is 3.9%, whilst Germany’s is 10.9%.

UK businesses increased R&D expenditure by 6.9%.

The predominant industry contributing to this was…you guessed it, pharmaceuticals!

Only two of the top 50 biggest global spenders on R&D were UK based companies – AstraZeneca at no. 29 and GlaxoSmithKline at no. 30. Both of these companies are in lower positions on the scoreboard than in previous years.

The type of R&D expenditure that UK businesses are doing has changed.

UK companies showed a large percentage increase in ‘medium-high tech’ R&D (which the scoreboard describes as sectors such as auto parts; automotives; electrical parts), a moderate increase in ‘high tech’ R&D (e.g. aerospace; biotechnology; computer services), and a decrease in ‘low-tech R&D’ (e.g. construction & materials; iron & steel; forestry & paper)

We have already discussed to improve overall R&D expenditure from current levels to 2.4% by 2027, with a longer term goal of 3%. As business is the biggest contributor to current levels, industry will need to be leveraged by public sector investment in order to reach these ambitious goals within this timeframe, and to keep up with both EU and non EU counterparts.

United Kingdom Research and Innovation (UKRI)’s roadmap for how the body intends to reach the 2.4% and eventually the 3% target is expected to be revealed next year, which will hopefully provide further guidance on how both the public sector and industry, along with higher education and private non-profit sectors can work together to achieve this. EEF as the voice of UK manufacturers will continue to represent the needs of the sector on this issue.