The recently published white paper on the Government Industrial Strategy focuses heavily on research activity but fails to recognise the importance the policies which are required to enable businesses to accelerate growth and boost the UK economy. An indicator of this is how the report still falls back in the old measure of R&D as a % of national GDP.
For businesses this is a meaningless measure. We have been here before. In 2002 the EU Lisbon agreement and subsequently the 2003 “Barcelona target” set the target at 3%. In those days, R&D was mostly focussed on research as defined by Frascati. The UK government embodied this target (albeit at a reduced 2.5% level) in the 2004 Science and Innovation Investment Framework. Despite being championed by arguably the strongest Chancellor in the last 30 years, policies never achieved this target or even prior to the financial crisis any progress towards it.
So why doesn’t this target encourage more R&D especially in business? There are several reasons but perhaps the most significant are:
_____________Pharma: GSK 13% v Astra Zeneca 23%
_____________Auto: Toyota 3.7% v VW 6.4%
_____________Software: Apple 3.45% v Microsoft 14%
So is there a better way to focus Industrial Strategy? The key to policy actions in this area is to focus on the commercialisation of technology to enable established companies to accelerate growth and enable small companies to scale up their activity. To do this we need a full understanding of how the components of the whole R&D landscape fit together so that gaps in policy can be identified and Government can aim support at where it is needed to achieve the strategic goals of an industrial strategy. A recent book, Camels Tigers and Unicorns, co-authored by one of my R&D Society colleagues, Uday Phadke and based on extensive company research, highlights some possibilities. And there are signs that some of our large company CEOs are recognising this emphasis. For example, Emma Walmsley (GSK) recently demanded bigger returns from R&D, she is reported as having said:
“The clear priority here is making the right choices to develop our pharma pipeline which is promising but unproven. We have a lot of work to do here to make sure our R&D and commercial organisations are partnering really effectively together.”
CEOs with a clear focus on adding value and growth can drive their businesses forward by focusing the whole organisation on the commercialisation process of new ideas. We need more of these business leaders involved in shaping the Industrial Strategy.
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