Cutting investment in research and development (R&D) to help plug the UK Government’s fiscal black hole would be counterproductive and damage future waves of innovation, says Vice Chancellor of Swansea University Paul Boyle.
Chancellor Jeremy Hunt will announce in his autumn statement tomorrow a series of tax cuts, fiscal drag tax band threshold freezes - with expectation that he will reduce the rate at which people pay the 45p top rate from £150,000 to £125,000 - and in real terms cuts to public expenditure, to fill a £55bn deficit.
However, Prof Boyle has urged the chancellor not to cut funding - via the various research councils and innovation bodies like Innovate UK - on early stage R&D. He said that while public sector investment in R&D in the UK was lower than in many major economies, UK researchers still out performed competitors - but without an improved funding environment this couldn’t be sustained.
Writing in the Financial Times, Prof Boyle said: “There are difficult decisions ahead on tax and spending. But some cuts, such as in research and development, would prove a tragically misguided false economy - and show that the UK had failed to learn from mistakes that have hampered us in the past. “Innovation is a vital tool for improving our productivity. The gains come from new ideas applied in a commercial context, but generating the ideas themselves requires time, money and a great deal of work. By cutting the budget for foundational research, we would be shutting the door on future innovation - and with it the new businesses that fuel growth and eventually pay for public services.”
Amongst ground breaking innovation coming out of UK universities, he cited his own university’s involvement in the SPECIFIC project. Prof Boyle said: “Researchers (Swansea) are creating buildings that store and release energy. They’re developing technologies such as printable solar cells and material that stores summer heat for a winter use. They have created seven spinout companies and work with hundreds of businesses and partners.”
He said the project, as well as many others, have relied on EU funding via that the European Regional Development Fund. He added that the UK Government’s replacement for EU structuring funding, the Shared Prosperity Fund, wouldn’t make up the shortfall.
Prof Boyle said that for every £1 spend on R&D in the UK, it stimulated between £1.96p and £2.34p of private investment. And he called on the UK Government to stick to a target of R&D investment of 2.4% of GDP, which he said would still be below competitor economies such as Germany which invests 3.1%, the US 3.4%, South Korea 4.8% and Israel 5.4%.
He added: “We need to get serious. To think that they will (researchers) go doing so indefinitely without proper support would be grossly complacent. The Conservatives showed the right ambition with last year’s pledge to invest £20bn annually in R&D by 2024/25. Despite all the immediate pressures Hunt faces this week, he should hold to it.”
