On July 1 the Department for Business, Energy & Industrial Strategy (BEIS) published its R&D Roadmap, a 60-page paper outlining the government’s vision for cultivating a more science and technology-focused economy. But what does this Roadmap propose? and what will be the impact for UK Businesses?
The roadmap touches on every key element of the research and innovation agenda, and signals not only massive investment but also welcome, overdue, reforms to help increase value for money and strengthen research culture. In particular, the plan to establish the UK Advanced Research Projects Agency, to fund high-risk, high potential return research projects, is bold and visionary. A country that aspires to be more innovative must be willing to be experimental in its funding approach.
With the government planning a substantial expansion to R&D investment – rising to £22 billion a year by 2024/5 – the roadmap offers a valuable preview of how this money will be spent to increase productivity and cultivate future breakthroughs.
Office for Talent
The supply of talent featured heavily in the R&D Roadmap. This is not surprising given the pivotal role talent plays in innovation. The roadmap presented a range of ideas for attracting talent from overseas, nurturing it domestically, and increasing workforce diversity – an important step in distributing the benefits of innovation evenly across the country.
The most significant announcement in this or any other section of the roadmap was the creation of the Office for Talent, which will be tasked with luring high-skilled workers from overseas. Its precise remit is unknown, but analysts believe this new office will hold sway over immigration policy and have the power to award, modify, and accelerate visas for skilled workers.
Yes, the Office for Talent will have the power to increase the supply of skilled labour into the UK. But well outside of its control will be the short and medium-term damage caused by Brexit and the likely cancellation of freedom of movement. While decreasing visa processing times will inevitably help startups and scaleups, a visa-based system cannot match the speed and dynamism of unfettered access to the EU’s jobs market.
R&D Place Strategy
The government’s R&D Place Strategy is a new initiative to cultivate regional increases in productivity. The government will do this by funding centres of excellence, areas of “untapped potential”, and regions that are traditionally less R&D-intensive.
At its heart, this is a plan to restore some parity between tech hubs like London and Manchester, which take the lion share of funding, and the rest of the country. This imbalance is one of many factors spurring regional inequality, which the government is hoping to address through its much-touted ‘level up’ initiative.
We cannot project the full impact of the R&D Place Strategy until it is published in full this Autumn. Even then, it will be difficult to unpick its outcomes from those of other region-specific schemes. But plans to bring opportunity to a more diverse set of founders and thinkers is a positive step.
Without a doubt, empowering entrepreneurs from a wider variety of backgrounds will give rise to a host of new ideas, driving innovation.
One of the biggest questions facing the UK’s innovation ecosystem is ‘will British companies have access to EU grant funding after Brexit?’ The R&D Roadmap has provided an update here. And it appears to be good news.
The report says the UK government is seeking to “fully associate” with Horizon Europe, the successor to the widely successful Horizon 2020 scheme, which expires this year. If it succeeds, UK businesses would have complete access to Horizon Europe’s numerous competitions, with the potential to secure billions of Euros in development funding.
If negotiations do fail, the government is promising to “implement ambitious alternatives as quickly as possible from January 2021”. This could see existing grant schemes given extra funding, or the government covering additional costs associated with participating in Horizon Europe as a third party.
A more innovative future
The R&D Roadmap makes a clear case for innovation: it creates jobs, lessens social problems, and increases prosperity for the whole country. It also makes a case for public investment in innovation, the benefit of which has been documented by numerous studies.
Funding, delivered through well-designed schemes like R&D Tax Credits, the Creative Industries Tax Credit, and EIS simultaneously reward development work while reducing the risks associated with it. This double-edged benefit creates a powerful incentive for thousands of innovators. And for certain businesses working on risky, blue-sky projects, government funding is often their only source of finance.
Finch & Associates’ team of tax advisers are experts in assessing and making claims for R&D Tax Credits and Creative Industries Tax Credits on behalf of our clients. And unlike many specialists in this area, Finch & Associates also advises on many other areas of taxation, so we can advise you on your broader personal and business needs. If you have any questions about these schemes, please call the team on 01275 867350 or send us a message now.