UK Chancellor's pre budget report includes strong focus on science and innovation
In his annual pre budget report, the UK Chancellor Gordon Brown has warned that if Britain is to succeed in the global economy it must pursue a 'national mission' to establish world leadership in science, education, skills and enterprise. In attempting to do so, Mr Brown announced that he is to re-examine the research and development (R&D) tax credit for medium sized science-based companies, remove tax barriers to the formation of university spin-offs, and promote 'Science Cities' for the north of the country, starting with Manchester, Newcastle and York. The Chancellor told the UK Parliament: '[T]he measures in this pre budget report are informed by the Treasury's assessment [...] of long-term global economic challenges to 2015: that to succeed in the global economy Britain must build on our strengths - our stability, global reach, scientific genius and world class universities [...].' Countries at the forefront of research and innovation will be best placed to move into those high value-added, technology driven areas that can best deliver new sources of growth, according to the pre budget report. While the document points to the fact that the UK is the G7's top performer in terms of the productivity of its science base - with more citations per capita than any other member - it also warned that other countries such Germany are quickly catching up. Also worrying for Mr Brown, the report notes that while the country is a strong performer in academic research, 'the UK is not in as strong a position with respect to innovation in business.' One reason given is that the country has traditionally been poor at transferring knowledge from the science base to industry, and increased collaboration is therefore an important precondition. As well as the fiscal measures and 'Science Cities' initiative announced by the Chancellor, the report argues that: 'Businesses also have a role to play by directly investing in innovation themselves. [...] Government is encouraging greater business investment in R&D through the tax system, with the launch of the R&D tax credits scheme for SMEs [small and medium sized enterprises] in 2000 and its extension to larger companies in 2002.' Most fundamentally, however, the report highlights the need to raise the proportion of UK GDP spent on research from its current level of 1.9 per cent up to 2.5 per cent. While this falls below the EU's 3 per cent Barcelona target, the report concludes that: 'If met, this level of investment would put the UK in a position to secure a leading place among the major European countries and substantially close the gap between the UK and the US, the foremost innovation-driven major economy.'
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United Kingdom