United Kingdom

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The United Kingdom is a very open economy, and its STI system enjoys a high level of funding and participation by foreign firms. In 2012, the government launched the Industrial Strategy, which focuses innovation policy on areas where government action can have a real and early impact.

Hot Issues

Hot Issues are major national STI policy priorities, as self-reported by countries in their responses to the OECD STIO 2014 policy questionnaire.

Targeting priority areas/sectors

The government’s Industrial Strategy seeks to develop strategic partnerships with industry in 11 sectors. These are sectors in which the United Kingdom leads or has the potential to lead the world and which may be able to stimulate growth throughout the economy. The most significant of these are the co-funded Aerospace Technology Institute (USD 2.8 billion or GBP 2 billion), the Automotive Advanced Propulsion Centre (USD 1.5 billion or GBP 1 billion) and the Centres for Agricultural Innovation and an Agri-Tech Catalyst (USD 231 million or GBP 160 million).<br /> <br /> The Industrial Strategy also sees the government investing in eight cross-platform emerging technologies for which the United Kingdom has the depth of research expertise and the business capability to make the most of them, with a budget of USD 879 million (GBP 600 million) in 2012. In addition, the government is developing a network of Catapult Centres, which give businesses access to specialist equipment and emerging technologies and connect them to other companies and to academic expertise.

Addressing challenges of STI globalisation and increasing international cooperation

UK researchers are well integrated in international networks (Panel 1q, r). Several initiatives promote strong links with emerging countries. For example, the Technology Strategy Board (TSB) has launched two jointly funded collaborative R&D programmes with China (on sustainable manufacturing technologies) and with India (on affordable health care and clean technology, particularly energy systems), worth a total of USD 15 million (GBP 10 million). The government is also investing USD 115 million (GBP 80 million) in the Global Collaborative Space Programme over five years to co-operate with emerging countries in developing space capabilities and technology. A further USD 108 million (GBP 75 million) will be invested annually to improve the research and innovation capacity of emerging countries and to build research partnerships with the United Kingdom.

Encouraging innovation in firms and supporting entrepreneurship and SMEs

The UK government has taken several measures to increase innovation in companies and support SMEs, especially through TSB programmes. In the 2013 Budget, the government announced an expansion of the Small Business Research Initiative (SBRI), which seeks to drive innovation through public procurement. This expansion will involve specific targets for key departments with the expectation that the value of procurement contracts via SBRI will increase from USD 57 million (GBP 40 million) in 2012-13 to over USD 290 million (GBP 200 million) in 2014-15. In 2012, the Innovation Vouchers programme was formally launched to enable start-up, micro, small and medium-sized UK businesses to access up to USD 7 000 (GBP 5 000) worth of advice and expertise from universities, research organisations or other private-sector knowledge providers. The Launchpads scheme supports the development and strengthening of clusters of high-technology companies in specific technologies and geographical locations. Launchpads provide base funding through approved R&D projects and acts as a catalyst to help the companies behind the projects to attract more investment. The United Kingdom is also currently setting up a new national development bank, the British Business Bank, to increase the supply and diversity of finance available for UK SMEs.

Country Charts

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Selected Highlights

STI policy governance

The United Kingdom is increasingly investigating the feasibility and advantages of systems evaluations because it considers that evaluations of individual policy tools may not reveal the true extent of their impact in complex contexts. The TSB’s review of the Low Carbon Vehicles Innovation Platform is an early example of the systems approach to evaluation.

Universities and public research

The United Kingdom is among the top performers in publication counts (Panel 1c) and boasts a large share of the world’s leading universities (Panel 1b), which are active in research and patent applications. Academic excellence plays a large part in university research funding, with block grant allocations dependent on the results of the Research Excellence Framework (REF) exercise for assessing research quality. In 2013, the government published additional guidelines for reviews of PRIs with principles that help reviewers identify and assess the specific role and impact of individual institutes.<br /> <br /> Research Councils UK implemented an updated open access policy in 2013 and provided funding to over 100 universities to support its implementation. New measures in this respect include the Gateway to Research (http://gtr.rcuk.ac.uk), which enables text and data mining for research, and a freedom of information research exemption, and the Research Sector Transparency Board, which, established in 2012, advises government on how to increase access to research data.

Innovation in firms

The relative importance of R&D and innovation tax incentives in overall public support for business R&D and innovation has increased recently. The R&D tax credit rate for SMEs has risen to 225% and the minimum threshold of eligible expenditures was abolished as of 2012. An R&D expenditure credit (RDEC) scheme was introduced in 2013 and is slightly more generous than the large company R&D tax relief. It will replace the current tax credits from 2016. The R&D Allowance (RDA), formerly known as the scientific research allowance, gives relief for capital expenditures on R&D. The Patent Box scheme was introduced in 2013 to provide an additional incentive for companies to retain and commercialise existing patents.

Innovative entrepreneurship

New legislation on copyright will be in force from 2014 to reflect the radical changes the digital revolution has brought to the creation and distribution of creative, scientific and academic material. The legislation extends the existing exceptions to copyright, but with suitable safeguards for rights holders. Other measures that can help IP holders improve the efficiency of IP application and protection include the Intellectual Property Office IP for Business toolkit and the Intellectual Property Enterprise Court.

Skills for innovation

The Department for Education (DfE) is spending up to USD 200 million (GBP 135 million) over four years (2011-15) on support for science, technology, engineering and mathematics in schools. Measures include STEMNET, which works with thousands of schools, colleges and STEM employers, to enable young people of all backgrounds and abilities to meet inspiring role models, understand real-world applications of STEM subjects, and experience hands-on STEM activities. The government is also providing more generous bursaries and scholarships to increase the number and quality of science and mathematics teachers in schools. The country continues to suffer shortfalls in engineering skills, as highlighted in the 2013 Perkins’ Review of Engineering Skills, which calls on the government and the engineering community to focus their efforts on inspiring the engineers of the future and addressing skills shortages in the industry. The review makes 22 recommendations, focusing on inspiration, academic foundations, vocational education and higher education.<br /> <br /> In tertiary education, government controls on total student numbers in publicly funded HEIs will be removed from 2015-16, allowing all institutions to compete freely for all suitably qualified students. The government anticipates that this will allow up to 60 000 additional, suitably qualified students to enter higher education. Moreover, through its funding of universities, the government will encourage universities to focus the additional places on STEM subjects, which are considered central to long-term economic growth.