UK Innovation Continues Positive Trend
Innovation accounted for two thirds of average labour productivity growth in the UK between 2000 and 2007 according to the 2009 Annual Innovation report, published today.
The report, a yearly analysis of innovation identifying trends to pinpoint areas of strength and weakness, found that most national indicators show improvement, although venture capital investment had gone down.
Today also saw the first closing of the £200m UK Future Technologies Fund managed by the European Investment Fund. This is in addition to the £125m Environmental Investment Fund managed by Hermes. The first closing of these funds creates a £325m UK Innovation Investment Fund, including £175m of private sector investment, to provide equity finance for technology based businesses in the UK. The UK Innovation Investment Fund has been established to drive economic growth and create highly skilled jobs by investing in businesses where there are significant global opportunities.
Key findings from the Annual Innovation report include:
- Investment in R & D in 2007 reached 1.79% of GDP, represents £25.4 billion and increased by 5% from its value in 2006. 45% of R & D funding in the UK comes from UK businesses (a small decrease in value and overall proportion compared to the figures reported in the previous report), and 32% from Government. 17% is funded from overseas, mainly by business which is high when compared with Canada (9%) and Japan (0.3%).
- Intangible investment in innovation by business, a key driver of innovation in the UK economy, in 2007 was estimated at £133 billion
- In 2007/08 R & D tax credits claims totalled £790 million, based on almost £8.7 billion of R & D expenditure in businesses. R & D tax credits form the single largest source of government funding for business R & D. The amount claimed has continued to rise, (up 13% on 2006/07), and was based on almost £8.7 billion of R & D expenditure. Claims are expected to continue to increase, totalling £820 million in the year to 31 March 2009.
- First degree science, technology, engineering, and maths (STEM) qualifiers increased by 4.2% between 2006/7 and 2007/8. STEM entries at A level have also continued to increase (by 9.7% since 2000).
- UK Universities' external income increased by 6.5% from 2006/07 to 2007/08 totalling £2.8 billion, demonstrating strong progress in an important indicator of the commercial benefits of the higher education sector.
Science and Innovation Minister Lord Drayson said:
“Our world class research base and successful university spinouts create the foundations we need to innovate and rebuild our economy for sustainable growth. This report shows some encouraging signs. We must await next year’s report to better understand the impact of the recession, but we have already taken action. Today’s first closing of the UKFTF fund managed by EIF brings total investment in the UKIIF to £325m, which is now ready to invest.”
The £950 million Strategic Investment Fund has also been set-up to support a range of targeted investments across the UK economy to support growth and innovation.
The report also highlights the key role played by partner organisations, including the Technology Strategy Board, the National Endowment for Science technology and the Arts and England’s Regional Development Agencies. These organisations play a vital role in delivering innovation support and promoting innovation across the UK in business, the public sector and the third sector.
News Release issued by the COI News Distribution Service on 22 February 2010
1 Mar 2010