Whilst it is not good news for most for those most severely impacted by the current cost of living crisis, it at least might create a focus around the need to address long standing and systemic issues that Britain faces around productivity and economic growth.
The UK is not alone in facing a crisis brought on by high inflation which has been driven by global factors, but recent analysis from the Nuffield Foundation suggests that average UK families are now £8,800 a year worse off than an average of 5 comparable countries and the gap has increased over the past 15 years. Although some financial support has been put in place to address the immediate energy crisis and a series of industrial disputes have arisen in both the public and private sectors, these do not address the real root cause of the problem – wealth can only be increased in a sustainable way by addressing the lack of economic growth, poor productivity and dramatic demographic and variations in incomes across the UK.
The current government appears to have exacerbated the long-standing mistake confusing science and innovation. For sure, science can be a launch pad forinnovation but other factors such as access to investment, skills supply, commercial markets all matter. The UK still has a dominant role in science as demonstrated by recent statistics, and it is understandable that many want to protect this. But equally the decline in living standards and the competitiveness of the UK compared to many of our peers is a clear sign that other things are amiss and being a “Science Superpower” will not alone fix the issue. We need to identify and address this weakest links in our innovation ecosystem and pay more attention to exporting products rather than raw science. Initiatives like Aria (the underpowered UK version of DARPA) have a high risk of failure and any benefits will be way out in the future. We need policies that will stimulate faster and more urgent growth.
All is not grim, there are many positives the UK can look towards. But it is time for focus and action. Beyond helping those most affected by the cost of living crisis, we need to establish a credible industrial strategy. Hopefully now that the financial crisis that was triggered by inflation and the rash dash for growth initiated by the short-lived Truss administration, has been stabilized in the Autumn statement, 2023 will see some clearer policies to support economic growth. As reported in our recent newsletter, The Prime Minister suggested three areas of focus in supporting innovation;
(1) harness innovation for economic growth,
(2) embed innovation in public services and
(3) teach people the skills to be great innovators.
The time has come to see policies being developed that will turn these into practice. And to formulate these, we need active debate with all the key stakeholders who have a role in translating our science base into the innovation that will drive growth. The R&D Society, along with is partners looks forward to playing its role in this process.
 AverageUK families £8,800 a year worse off than in comparable countries, Nuffield
Foundation, July 2023 https://www.nuffieldfoundation.org/news/average-uk-families-8800-a-year-worse-off-than-in-comparable-countries