The 2009 R&D Scoreboard, produced by the Department for Business, Innovation and Skills, examines the research and development spending of 1,000 UK companies. Dubbed the UK1000, these are the businesses which invested the largest amounts in R&D.
The Scoreboard does not measure total research and development spending, merely the biggest investors, so some substantial businesses (not to mention the wider business population) are not captured in the figures.
The Scoreboard also considers the top 1,000 companies globally (G1000), which includes only a subset of the UK1000, in order to make international comparisons.
UK and global R&D expenditure
Amongst this global top-thousand, 80% of expenditure occurred in the USA, Japan, Germany, France, or the UK.
46 of the businesses in the G1000 are located in the UK, and they were responsible for 62% of all R&D spending undertaken by the UK1000. Perhaps unsurprisingly, spending is highly skewed towards a small number of very large investors.
The sectoral balance of R&D expenditure within the G1000 is very different from the balance within the UK1000.
Globally, three general sectors each share a large and roughly even proportion of R&D spending:
- Pharmaceuticals and biotechnology
- Automobiles and parts
- Technology hardware and equipment
Together, these three sectors comprise the majority of the G1000’s spending.
The 46 UK members of the G1000 have a much more unbalanced distribution of spending: almost half of their total expenditure occurs in the pharmaceuticals and biotechnology sector, with the expenditure in the other two major sectors very small in comparison.
In other respects, the UK’s research base is more diversified. There’s a much higher proportion of expenditure in the ‘other’ category than any of the other big spenders.
The regional perspective
So how is R&D activity distributed within the UK?
54 of the top 1,000 UK companies by R&D expenditure were operating in the West Midlands (5.4%).
They were responsible for £875m of R&D investment, which constitutes only 3.3% of the UK total.
However, by these measures, R&D investment within the UK is very geographically unbalanced:
- 60% of total expenditure occurs in London
- 82.4% of all expenditure occurs within the greater South-East
Spending in the West Midlands is higher than all spending in the three Northern English regions (North West, North East, and Yorkshire and the Humber) combined.
Spending in the West Midlands is 3.7 times higher than spending in the East Midlands, and 7.8 times higher than Wales.
There is no easy way to assess the precise sectoral breakdown on a regional basis, but within the West Midlands’ share of the UK1000, several of the biggest spenders are automotive companies. Land Rover, Jaguar, and GKN together account for 58% of the UK1000’s West Midlands R&D expenditure.
Naturally, the UK1000 and the UK subset of the G1000 probably have very different sectoral focuses, but it does suggest that the West Midlands might be strong in one of the sectors where the UK as a whole is comparatively weak.
R&D spending amongst the West Midlands UK1000 grew 6% over the past four years, compared to 20% for the UK as a whole.