PROFESSOR DYLAN JONES-EVANS

The most competitive economies in the World are those which invest in research and development (R&D) and focus on driving innovation. Unfortunately, as several research studies have shown, Wales does not perform well in terms of generating or developing innovation and this, in turn, impacts on the nation’s economic performance.   For example, a recent report from NESTA pointed out that Wales is one of three UK economic areas with low R&D intensity in key sectors. Official government statistics also reveal that over the last fifteen years, Welsh businesses have been responsible for only 2% of business expenditure on R&D in the UK.   The UK Innovation Survey showed that only 34% of Welsh firms were classed as innovation active in 2016-18 as compared to 38% for the UK. Businesses in Wales also  have lower levels of internal R&D than businesses in any other nation or region apart from Scotland.  This shouldn’t be too much of a surprise as Wales ...

If we are to create a successful knowledge-based economy, then the transfer of knowledge from universities to businesses will be a vital part of that transformation over the next decade. In particular, understanding what actually happens in the interactions between higher education and industry and improving the way both partners work together will be key in maximising the potential to create and support the industries of the future. That is why new research published this week by the Centre for Business Research at the University of Cambridge and the National Centre for Universities and Business (NCUB) should be vital reading for Vice Chancellors, chief executives and policymakers. It is an impressive study and this column will not be able to do justice to all of the results that have emerged from a survey of nearly 4,000 businesses examining how they interact with universities in the UK. However, some of the higher level findings show that universities and businesses do work together...

Innovation is one of the key drivers behind the most competitive economies in the World.  Yet as various studies have shown over the last decade, Wales is one of the least intensive nations or regions of the UK in terms of research and development (R&D). This is not only in regard to the considerably lower levels of research funding attracted by the university sector over the last two decades but also in terms of the lower levels of expenditure by Welsh firms on R&D which means that only a third are active in terms of innovation across the economy.  This is despite hundreds of millions of pounds of European funding being focused to boost innovation since devolution which, unfortunately, has largely failed to increase the performance of either higher education or the private sector relative to the rest of the UK. So what can be done to improve this? That is the subject of a recent paper by two of our leading thinkers on innovation namely Professors Rick Delbridge and Ke...

As many economists will tell you, innovation is key to improving the competitiveness of nations and regions around the World, especially in recovering from the economic downturn caused by the current Covid-19 pandemic. Given this, it is good news that the UK Government has set a target in its 2017 Industrial Strategy of raising public and private investment in research and development (R&D) from 1.7% of GDP to 2.4% by 2027.  This increased spending on scientific and technological development will then hopefully be commercialised by businesses with positive impacts on the UK economy.  Whether that happens will be largely dependent on the number of businesses that are engaged in innovation across the UK. Unfortunately, the latest data shows this is in decline and according to the latest UK Innovation Survey 2019 which was published this week and covers the period 2016-2018, only 38% of UK businesses were innovation active as compared to 49% for the period 2014-16.  By s...

Back in 2002, I presented a paper on the state of research and development (R&D) in Wales to the then Economic Development Committee in the National Assembly for Wales. It found a long-term trend in the low level of R&D carried out in Welsh businesses and that Welsh universities received less funding relative to the rest of the UK higher education system.  Not surprisingly, it concluded by stating that if Wales was to achieve its aim of becoming a strong knowledge-based economy, there must be increased emphasis on the development of R&D within the public and private sectors in Wales. Fast forward to 2020 and very little seems to have has changed with the latest data showing that Wales has the lowest level of private sector expenditure as a proportion of economic output of any nation or region in the UK.  In addition, Welsh universities receive a lower share of research funding per head of population than they should if this was devolved and this pattern has been co...

Over the last few weeks, much of the focus of politicians and policymakers has been on containing the spread of Covid-19 and developing interventions that can sustain the economy at a time when the majority of businesses have been forced into lockdown. As the Prime Minister considers how to start relaxing the rules for both UK citizens and businesses, the focus is turning to the effect of the virus on the economy both in the immediate future and the long term. Whilst there is much speculation about the potential economic future of the UK, it is heartening that the Bank of England’s latest monetary policy report provides some guidance on this issue. In terms of the UK economy, the situation still remains uncertain and remains is highly dependent on how the pandemic evolves over the next few months and more importantly, how governments, households, businesses and financial markets respond to this change.  There remains an assumption, despite the tabloid headlines, that the social dis...

One of the headline promises by Prime Minister Boris Johnson in the build-up to the last general election was a pledge to double government research and development (R&D) spending to £18 billion within five years as part of a new wave of economic growth. This builds on the target by previous government’s Industrial Strategy to raise investment on R&D to 2.4 per cent of GDP by 2027.  Whilst universities will be important in reaching this target, the majority of R&D in the UK is carried out by the private sector. Given this, it is critical that businesses are given the right support and incentives to invest into R&D over time. The good news is that the latest statistics show that R&D expenditure on research and development performed by UK businesses was £25 billion in 2018, an increase of nearly six per cent on 2017. In terms of sectors, pharmaceuticals remain the industry that spends the most on R&D accounting for £4.5 billion of expenditure in 2017 (or 18% o...

At the end of every year, the Office for National Statistics release a whole raft of data that demonstrates the state of the Welsh and UK economy.  This year, following a general election where a new UK Government has promised to transform the fortunes of the nations and regions outside of London, that data is even more pertinent to where the focus should be within the Welsh economy over the next decade. According to the latest data on Gross Domestic Product (the standard measure of economic growth) which was released last Thursday, Wales has finally lost its status as the poorest part of the United Kingdom swapping places with the North East of England.  This is despite the fact that our economic growth between 2017 and 2018 was slightly below that for the UK as a whole and that we remain at only 75 per cent of the UK economic prosperity levels.  Indeed, with London (171 per cent) and the South East of England (107 per cent) being the most prosperous parts of the UK, it ...

It is generally accepted by economists around the world that research and development (R&D) is the foundation to the development of innovative and competitive economies. Given this, it is not surprising that one of the principles of the Welsh Government’s current “ Prosperity for Al l” strategy is to support businesses to innovate, introduce new products and services and succeed. To achieve this, it is clear that businesses need to be encouraged to invest more in R&D as this will lead to better products and services that markets will consume. One of the key indicators for assessing the innovation that takes place within the UK is the measure of research and development spending by the private sector, otherwise known as BERD. The latest statistics show us that BERD for the whole of the UK in 2017 was £23.7 billion with the three most prosperous regions – London, South East of England and the East of England – accounting for 52 per cent of this expenditure. In contrast...

With the UK moving towards an unsatisfactory agreement on Brexit, many are wondering what is the future for the UK economy after we leave the European Union. With much of the UK Government’s attention being focused towards negotiations with Europe, there is concern that there is very little being done to prepare the economic future of this nation. Given this, it was perhaps surprising to see a recent publication which highlighted an increased commitment to investment in research and innovation in the UK. The so-called “Allocations Booklet” sets out the Government’s commitment to reaching the target of 2.4 per cent of GDP investment in research and development (R&D) by 2027. To move towards achieving this target, additional investment of £7 billion in R&D has been announced between 2017 and 2022, which raises public investment in R&D to £12.5 billion per annum by 2022 and is, according to the UK Government, the biggest ever increase in public funding of R&D. P...

The economist William Baumol once suggested that “virtually all the economic growth that has occurred since the eighteenth century is ultimately attributable to innovation.”  Given the overwhelming evidence of the critical importance of research and innovation to prosperity over the last three hundred years, it is difficult to argue with the fundamentals of that statement. That is why an independent review into research and innovation in Wales, commissioned by the Welsh Government and published this week , should be welcomed by everyone who wants the Welsh economy to succeed. Written by Professor Graham Reid from University College London, it is probably one of the most important policy documents to come out in recent years, and sets out clear and unequivocal recommendations as to how Wales can stay ahead of the game in terms of ensuring that it not only grows its research base but that it makes a vital and continuing contribution to economic prosperity. The good news is t...

Last week, the Growing Value Wales Task Force - made up of leading academics and industrialists - published a ground-breaking report which examined the practical ways of harnessing the talent being developed in Welsh universities and strengthening research and development for the benefit of the nation’s economy. It is a timely piece of research given the imperative for the nation to become more innovative as we seek new opportunities following the decision to leave the European Union. Not surprisingly, the report emphasised that Wales remains in a relatively weak position with regard to the traditional metrics of research and innovation performance such as the percentage of GDP expended on R&D investments by firms. In addition, it showed that businesses are more likely to look to suppliers, clients and customers rather than seek external sources of innovation such as ideas from universities. This is despite the fact that there is high quality of research in Wales albeit wi...

T There is a general acceptance amongst economists that investment in research and development (R&D) plays a critical role in the economic development of countries and regions. As such, it is seen as an important driver of innovation and growth by policymakers and given the current frailty of the UK economy, it is not surprising that the CBI recently launched a campaign aimed at increasing the level of R&D spending in the UK. Apart from contributing to greater productivity and competitiveness, this would ensure that innovation will be at the heart of the nation’s industrial strategy following the decision to leave the European Union. And there is considerable work that needs to be done to make this happen especially as the latest statistics on R&D expenditure shows that whilst there is more investment going into this important area, this is considerably behind many other competitor nations within Europe. The good news is that £31.6 billion was spent on R&D in...

It is generally accepted that those countries that invest in research and development (R&D) get higher levels of innovation and therefore greater prosperity . This is especially the case in smaller countries such in Israel, Finland and Sweden which not only have some of the highest proportionate levels of R&D spending in the world, but are also classed the most competitive nations globally. Whilst levels of private sector funding into R&D is clearly important, government support is also vital especially in less competitive regions such as Wales. There is much debate about increased Welsh devolution with the new Wales Act promising increased powers in terms of areas such as income taxation in the hope that this may stimulate greater entrepreneurship and wealth creation if reduced.  However, some believe that there should also be changes to the way that UK government funding for research and innovation is managed, especially as it is yet to be devolved since 1999....

Last month, the Office for National Statistics released the latest data on the amount of expenditure spent by businesses in the UK on research and development (R&D) . In this instance, R&D is defined as “creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society and the use of this stock of knowledge to devise new applications”. Therefore, whilst R&D is normally thought of as being directly related to the operations of “high tech” businesses that are on the cutting edge of new technology, the report also gathers information on many established businesses that produce consumer goods and services, and which spend large sums of money on improving existing products. It is an important study in that it basically gives us a measure of whether businesses in the UK (and Wales) are spending money on R&D and, as a result, are looking to create more innovative products and services. ...