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Team Umunna

Labour’s shadow BIS team must put the ‘economy’ back into ‘knowledge economy’

Speed-reading is a useful skill. It becomes an essential one for a shadow minister coming into a new and unfamiliar department (see News page 6 via link below). So what should Chuka Umunna (Vince Cable’s new shadow) and Shabana Mahmood (following the universities bit of David Willetts’ job) be reading in their first few weeks in the job?

Back issues of Research Fortnight of course. Anything provided to them by their colleague Chi Onwurah, too. Also highly recommended is Jonathan Adams’ latest report on UK research (see View page 22 via link below). Adams’ analysis is particularly important because it amounts to an audit of the Labour years.

Before they begin to craft Labour’s response to the coalition, Umunna and Mahmood in particular would be well advised to explore the impact of their own party’s policies while in government—especially the high spending years from 1998 in which UK public-sector investment in R&D increased by a third in real terms. It’s hard to dispute some link between that spending and the fact that, by 2008, the UK’s research workforce had approximately doubled to 250,000.

One consequence of this spending rise is that the UK’s ratio of research workers in the labour force is among the world’s highest. Another is that the UK’s annual rate of PhD awards (17,000), equal to Japan’s, is third only to those of the US (60,000) and Germany (25,000).

A third impact is in the quantity of UK research papers, which increased from about 50,000 to 90,000 papers a year between 1991 and 2010. This increase is in line with those in established research-based economies. Moreover, UK research papers remain among the world’s most highly-cited in almost all fields.

But worryingly, Adams’ report shows that R&D spending by UK businesses has shown no significant increase. This contrasts with the OECD-average for business R&D spending, which increased by 80 per cent in real terms between 1991 and 2008—spearheaded by China, the US and Germany. “The UK clearly has exceptional research on offer but the market appears to choose not to invest,” concludes Adams.

So the question for the shadow BIS team—indeed for the real BIS team too—is this: why is UK industry spending on R&D not in line with partner and competitor nations? There will be no quick answers.

Adams thinks that the UK’s traditional strengths in pharmaceuticals may be weakening, with the departure of Pfizer merely the latest example. An additional explanation might be that UK industry felt no need to invest given the availability of public funds and given a formerly booming economy. In other words when public funds were plentiful, industry had no incentive to find more partners with which to innovate.

Well, there is an incentive now: it’s called survival.

Now that public funds are scarce, and the state of the economy is what it is, companies must think differently to survive. The irony may well be that, while some of the UK’s research metrics start to head in a downward direction, we may yet see an upturn in business spending on R&D.