UK R&D may be worth far more than currently estimated
The value of research and development undertaken in Britain each year could be more than 20 per cent higher than estimates currently show, early findings from a revamped Office for National Statistics survey showed on Monday.
The redeveloped Business Enterprise Research and Development Survey suggested the amount of R&D in 2022 was 53.0 billion pounds ($66.4 billion), compared with an existing estimate of 43.4 billion pounds – a 22 per cent increase.
R&D contributes to gross fixed capital formation, a broad measure of investment in the economy that includes business and government investment, as well as the construction of buildings. It has long been a weak spot in Britain’s economy.
The latest data from the Organisation for Economic Co-operation and Development show Britain ranked bottom in 2022 among Group of Seven advanced economies for gross fixed capital formation as a percentage of economic output, at 18 per cent.
Monday’s ONS release suggested the true picture may be somewhat better than that – assuming Britain’s peers do not implement similar changes to their own measurement of R&D.
“Initial analysis has shown that the BERD Survey improvements could raise the level of research and development within business investment and whole economy investment,” the ONS said.
The BERD survey now takes responses from 38,500 businesses, up from 5,400 previously.
Early analysis showed the greater R&D might lift the level of business investment by 3.9 per cent, while the impact on the level of overall economic output would be smaller, the ONS said.
The ONS said it will not be able to establish the full impact of the new R&D estimates until it undertakes an annual stock-take of the British economy 2025.
($1 = 0.7978 pounds)