R&D and innovation specialists GovGrant have today revealed the UK economy is failing to capitalise on its world-leading academic prowess and intellect by not translating its R&D into commercial gain and creating intellectual property (IP).
Data analysis from CBI Economics commissioned by GovGrant comes at a particularly crucial time for UK policymakers, who have pinpointed innovation as one of the key drivers behind the post-COVID economic recovery plans.
The study’s findings are corroborated by the World Intellectual Property Office’s (WIPO) Global Innovation Index, which ranks the UK’s academic publications as being 1st globally, but ranks its innovation outputs as 3rd, behind both Switzerland and Sweden.
The UK’s shortfall in commercialising innovation is linked to lower investment in research and development (R&D), with the UK currently investing 1.7% of GDP, compared to an average spend among OECD nations of 2.4% and considerably behind Switzerland (3.3%) and the Republic of Korea (4.3%).
CBI Economics analysis commissioned by GovGrant provides a further analysis of the origin of IP applications, revealing where the investment in innovation is coming from. SMEs are shown to have a much lower propensity to file patents and are less likely to own IP rights, and the UK is no exception.
Only 9% of European SMEs were found to own IP rights, compared to 40% of large firms. In addition, the largest number of IP applications is dominated by a small number of large firms. In the UK, the country’s top 10 patent applicants, dominated by large firms, make up a fifth (18%) of all patent applications, but this is higher for other countries analysed, such as Sweden or Korea, where the top 10 patent applicants make up as much as 60%, and 42%, of all applications.
Despite a supportive policy environment for IP for large and small firms alike, the analysis points to areas of development which could help drive further value from R&D and help UK firms turn research into commercial outputs. The new report – Prosperity Pending – notes the UK’s IP system (policy and regulatory environment) is the second strongest in the world, according to the U.S. Chamber’s Global IP Centre – but its patent system is not working to its full potential.
The analysis finds that IP policy needs to be integrated with policy supporting businesses at the earlier stages of the R&D process, with incentives tailored to changing business needs as they progress through these stages. The UK could also stand to gain from expanding the current Patent Box to include other forms of IP and provide alternative models of obtaining IP rights for SMEs.
Read Prosperity Pending here.
Luke Hamm, CEO, GovGrant, comments:
“The UK is lagging behind on the global stage when it comes to generating economic activity from intellectual property. This is a value lever that continues to be underutilised and there is a clear opportunity for change. Whilst there is plenty of positive sentiment when it comes to R&D and innovation, there are some frank conversations that need to focus on addressing the weaknesses in how the UK takes world-leading academic prowess and leverage it into commercial gain.
“I hope this report acts as a much-needed stimulus and forces a comprehensive review of the UK’s approach to intellectual property, particularly with SMEs in mind.”
Rain Newton-Smith, CBI Chief Economist, said:
“The UK is home to some of the most pioneering firms in the world and renowned research and innovation institutions. As the UK begins to build back better from Covid-19 and reshape its role internationally, a dynamic innovation economy is essential – to foster prosperity, create high-quality jobs, compete globally, and attract investment.
“It’s great to see Government setting out the ambition to be a science superpower. We are starting from a position of strength, but as yet, we’re missing the long-term plan and investment to get us there. More than ever, the UK needs clarity and predictability when it comes to funding for innovation enabling long-term, strategic investment from government and business. The upcoming Innovation Strategy and Spending Review later this year need deliver on both.”
