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UK Horizon Participation

An urgent need to align with economic strategy

· Industrial Policy,Policy,Industrial Strategy,Entrepreneurship

Despite the euphoria expressed by many in rejoining the EU Horizon Programme, the benefits to the UK economy are less clear and need to be optimised.

A new agreement with the European Union that allows the UK to become a full associate participant in the Horizon and Copernicus programmes has rightly been celebrated by the science community which has enjoyed significant success in previous EU framework funding. It is worth noting, however, that the UK’s Associate status only includes access to grant funding from the EU innovation council, not equity funding (which is why the UK players previously involved in the EIT Accelerator Programme have ceased participation in the EIT Food Accelerator Network, for example).

So having rejoined the programme, it is worth deeper consideration as to how the UK can best gain from its renewed participation.

The European Commission summarises the programme as follows.

  • Horizon Europe is the EU’s keyfunding programme for research and innovation with a budget of €95.5 billion
  • It tackles climate change, helps to achieve the UN’s Sustainable Development Goals and boosts the EU’s competitiveness and growth.
  • The programme facilitates collaboration and strengthens the impact of research and innovation in developing, supporting and implementing EU policies while tackling global challenges. It supports creating and better dispersing of excellent knowledge and technologies
  • It creates jobs, fully engagesthe EU’s talent pool, boosts economic growth, promotes industrial
    competitiveness and optimises investment impact within a strengthened European
    Research Area.

These high-level objectives are generally aligned with theUK’s desire to maintain a leading role in tackling climate change and also seeking to boost economic growth. On the former point, Jeremy Hunt, the UK Chancellor announced in March that the UK’s response to US and EU green industrial strategies would form part of the Autumn statement due to be presented on November 22. So, if Horizon participation is intended tobe part of this strategy, then the timing is good, and we look forward to reviewing what is said at that time. On the latter point, around economic growth, the beneficial role of Horizon membership is currently less clear, based on historic data. A review of the data from the forerunning Horizon 2020 programme raises some concerns when considering the role of international programmes such as Horizon in the development of UK technology and innovation. Yes, the UK was the second largest beneficiary of EU funding, as has been frequently boasted by government and other organisations, but looking more deeply at the data, the alarming observation is that “for profit” companies in the UK only took 18.6% (equivalent to €1.46B) of this contribution
compared to an EU average of 28.2% (equivalent to €19.28B). This suggests that UK science is therefore disproportionately supporting commercial organisations in other countries. Furthermore, considering the top 100 for-profit organisations that gained EU support, only 8 were from the UK and they only accounted for 8% of the total funding allocated to these 100 organisations.

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We are not the first to note that a deficit of UK industrial participation in EU framework funding might impact the benefits to the UK economy. Back in 2006, in evaluating Framework 5, Alessandro Muscio noted

“….the results of our studyraise some questions about who is benefiting the most from framework research. Unlike in other European countries, at present UK participation in FPs is strongly biased toward HEIs and public research centres. Universities and research institutes score highest levels of benefits achieved and also seem to gain the most out of FP projects in terms of EAV. Research funded through framework suits particularly well this kind on institutions whilst leaves, for a number of reasons, partially dissatisfied private industrial organisations, to the point that in the near future around half of them will be less likely to apply for framework funding. If the EC is wishing to invest on industry networking and if Frameworks can be seen as a viable instrument for stimulating firms’ collaboration in research, then this trend must be reverted and the needs of industrial organisations accommodated”

As we have argued before, the UK innovation ecosystem has proved to be “leaky”; economic impact beinglost through an inability to adequately exploit its excellent science base, poor productivity and the innovative companies being acquired, and asset-stripped by foreign companies or failing to find the investment needed to support more rapid scaling. Horizon, asfor predecessor frameworks, risks being another contributor to this outflow.

Given the UK’s late entry backinto the programme, there is a risk that it may struggle to get the level of uptake in its share of the funding that it saw in previous framework programmes. And if there is low participationby UK organisation it may only get a refund if it rolls this over into the next programme, due to start in 2028.

So, as we get beyond celebrating rejoining the Horizonprogramme, we need to pay attention to how it can best support the UK’s objectives around industrial strategy, economic growth and sustainability.

  • We suggest that The UK government, potentially supported by someof the organisations that argued for rejoining Horizon conduct a policy review to ensure that participation by UK companies, research organisations and higher education establishments is optimised to align with the UK’s R&D objectives and industrial policy. The Research and Development Society will explore how it can support this activity.
  • Guidance should be provided to UK companies toachieve this objective
  • Metrics are put in place to ensure that theimpact of Horizon on UK industrial strategy is assessed, and lesson learned applied to future EU R&D framework participation.