UK company R&D intensity below international average, national scoreboard shows
Following the publication of the EU innovation scoreboard indicating that innovation in the UK is improving but at rates below the EU average, the UK has published its own research and development (R&D) scoreboard, revealing that overall, UK R&D intensity is below the international average. The scoreboard uses information from 597 UK-based private companies, 49 of which are from the FTSE 100. Altogether, the companies have investments in R&D totalling around £15 billion (around 24 billion euro) in R&D. Whilst the R&D investment in the UK remains at 2.1 per cent as a percentage of sales, the international average is much higher at 4.2 per cent. The UK also has a different R&D sector mix to that found elsewhere. For example, R&D investment in the UK is dominated by pharmaceuticals, with 38 per cent of investment being made in this sector. At 10 per cent, the UK also invests more in aerospace research than elsewhere. Internationally, the top two sectors for R&D investment are IT (information technology) hardware and the automotive industry, which together account for 45 per cent of investment compared with 13 per cent in the UK. The scoreboard does indicate however that IT hardware investment has increased both in size and intensity over the last two years. The UK's strongest sectors, pharmaceuticals, health and aerospace have also either maintained or improved their relative positions. The scoreboard also indicates however that overseas owned companies account for between 10 and 35 per cent of each sector's R&D investment. Medium R&D intensity sectors in the UK, such as electronics, software & IT services, chemicals and engineering have lower intensities than their international counterparts, mainly due to lower R&D investment by many medium sized UK companies. Sales growth is greater for high R&D intensity companies, and six times greater for companies with a higher proportion of sales from new products, the scoreboard indicates. The scoreboard concludes by saying that the challenge for all companies, particularly medium sized ones, is to 'invest in innovation-led profitable growth and to assess opportunities to make the transition from more mature product areas to higher value added, higher growth areas.