UK small companies continue to underinvest in R&D
1 min read
What is it about UK companies and spending money on R&D? It's a continuing saga and something which appears to be driven by short termism, rather than being in for the long haul.
In the days of the R&D Scoreboard – sadly discontinued by BIS as part of the Government's spending cuts – the UK would regularly be seen to be lagging other countries when it came to R&D investment. This despite the fact that attractive R&D tax credits were – and still are – available.
Now, more fuel has been added to the fire by Lord Digby Jones, ex head of the CBI. He's going to tell a conference on 26 July that UK companies – and small to medium sized ones in particular – are missing out on millions of pounds worth of EU cash.
The Growth Through Innovation conference will hear that Europe has set up a €1.4billion fund to help small companies innovate and to develop new products and processes. The implication is that the UK's SMEs can't be bothered to apply.
Quoting statistics that say, since the start of the recession, money spent by companies on R&D dropped by more than 25%, Lord Digby Jones will say much of this was due to small businesses cutting back.
"The UK spends 1.79% of GDP on R&D. This is behind the OECD average – behind Belgium! The UK R&D tax credit system works well but much more must be done with small, innovative businesses receiving special fiscal help."
Some companies are probably worried about being here tomorrow – and you might excuse a lack of a longer view – but there are other well established organisations that have no excuse for not taking advantage of R&D funding. With them, is it a case of short termism; taking a profit now, rather than investing for the future? Whatever the reason, it appears that not investing in R&D is common.
The question remains: why is UK industry so reluctant, in comparison to other countries, when it comes to investing in R&D?
Inevitably, in these discussions, there are calls to cut red tape and so on. Lord Digby Jones isn't going to disappoint. "The way in which SMEs can be helped to win funds to maximise their commercial and financial value must be simplified and made both easier and cheaper."
How simple do these companies want the process to be: phoning an 0800 number and asking for the cash to be sent around?
