Majority of UK labour productivity growth accounted for by
innovation
According to the 2009 Annual Innovation Report, innovation
accounted for two thirds of average labour productivity growth in
the UK between 2000 and 2007.
The report, a yearly analysis of innovation identifying trends
to pinpoint areas of strength and weakness, found that most
national indicators show improvement, although venture capital
investment had gone down.
In addition to the report, a £325m UK Innovation Investment fund
has been created due to the closing of the £200m UK Future
Technologies Fund, managed by the European Investment Fund and the
£125m Environmental Investment Fund, managed by Hermes.
The UK Innovation Investment Fund has been established to drive
economic growth and create highly skilled jobs by investing in
businesses where there are significant global opportunities.
Key findings from the Annual Innovation Report include:
- Investment in R&D in 2007 reached 1.79% of
GDP, represents £25.4 billion and increased by 5% from its
value in 2006. 45% of R&D funding in the UK comes from UK
businesses (a small decrease in value and overall proportion
compared to the figures reported in the previous report), and 32%
from Government. 17% is funded from overseas, mainly by business
which is high when compared with Canada (9%) and Japan (0.3%).
- Intangible investment in innovation by
business, a key driver of innovation in the UK economy, in 2007 was
estimated at £133 billion
- In 2007/08 R&D tax credits claims totalled £790
million, based on almost £8.7 billion of R&D
expenditure in businesses. R&D tax credits form the single
largest source of government funding for business R&D.
- First degree science, technology, engineering, and
maths (STEM) qualifiers increased by 4.2% between 2006/7
and 2007/8. STEM entries at A level have also continued to increase
(by 9.7% since 2000).
- UK Universities’ external income increased by
6.5% from 2006/07 to 2007/08 totalling £2.8 billion,
demonstrating strong progress in an important indicator of the
commercial benefits of the higher education sector.
Science and Innovation Minister Lord Drayson said:
“Our world class research base and successful university
spinouts create the foundations we need to innovate and rebuild our
economy for sustainable growth.
“This report shows some encouraging signs. We must await next
year’s report to better understand the impact of the recession, but
we have already taken action.
“The first closing of the UKFTF fund managed by EIF brings total
investment in the UKIIF to £325m, which is now ready to
invest.”
The £950 million Strategic Investment Fund has also been set-up
to support a range of targeted investments across the UK economy to
support growth and innovation.
The report also highlights the key role played by partner
organisations, including the Technology Strategy Board, the
National Endowment for Science technology and the Arts and
England’s Regional Development Agencies. These organisations play a
vital role in delivering innovation support and promoting
innovation across the UK in business, the public sector and the
third sector.
The full report is available on the BIS
website.