I beg to move,
That this House
has considered science and research in the UK and regional economies.
I am delighted to do so with you in the Chair, Mr Owen, and I take this opportunity to welcome the new Minister for Universities and Science to his job. I am looking forward to having many engagements with him on issues relating to higher education.
I move this motion as a Member representing a city whose wealth was built on innovation, from Benjamin Huntsman’s invention of crucible steel production in the 1740s to Harry Brearley’s invention of stainless steel in 1912 to the work today of Sheffield University’s Advanced Manufacturing Research Centre. Science, research and innovation have driven our city’s economy, just as they have for the country as a whole.
However, we face a challenge, because a generation ago the UK was one of the most research-intensive economies in the world and now we are one of the least. We have slipped from leading the OECD countries in research and development spend as a percentage of GDP in 1979 to our position now, where we trail behind all our competitors. The US invests 2.8% of its GDP in research; on average, both OECD and EU countries invest 2.4% of their GDP in research; but the UK now spends only 1.7% of its GDP on research. That is less than half the 3.9% of its GDP that is invested by South Korea, which, as a result of that investment, remains a major manufacturing nation.
Where have research and innovation been lost? Most strikingly, they have been lost within the private sector. The old world of R and D was dominated by the big companies—the likes of GEC and ICI—and their loss took out big chunks of our innovative capacity. The obsession with short-term returns for shareholders, which distorts our equity markets, has changed the attitudes of investors. The dynamic of long-term investment for long-term reward that drove the industrial revolution and built our economic strength has gone. Today there are just two UK companies among the top 100 companies around the world for R and D investment.
For some time, the impact of the decline in private sector investment in R and D was masked by the continued public sector investment of successive Governments, but that changed under the coalition, despite the best efforts of David Willetts, who occupied the Minister’s job for most of the coalition’s time in office and was a real champion of science and universities. As the Campaign for Science and Engineering highlighted in its “Science is Vital” campaign last year, publicly funded research slipped to less than 0.5% of GDP in 2012.