Accelerating business-driven R&D

Technological advancements are unfolding at an unprecedented rate, reshaping industries and economies on a global scale. To maintain a competitive edge, drive long-term growth, and address critical global challenges, accelerating private sector research and development (R&D) is no longer a choice—it’s a necessity.

Yet, it’s not just about funding or scientific exploration; it’s about transforming pioneering research (R) into practical, market-ready solutions (D). This journey—from initial discovery to real-world impact—is what will shape the industries and economies of tomorrow. 

UK business-led R&D, however, is facing a concerning decline. Between 2021 and 2023, business R&D expenditure in the UK dropped by 6%, resulting in a £3.4 billion loss in real terms. 

At the forefront of addressing this issue, NCUB has long advocated for the creation of the right policy, regulatory, and funding environment to fuel private sector-led R&D. To guide this transformation, NCUB established a Taskforce, led by Sir John Manzoni, with a clear mandate: to develop actionable recommendations that will ignite business-driven R&D and accelerate innovation across the UK. 

The Taskforce has engaged with a wide range of businesses and stakeholders through interviews and targeted surveys, gathering insights that are shaping a robust set of recommendations to be unveiled in the Spring. These recommendations will provide a roadmap for advancing business-led R&D while influencing the Government’s upcoming Spending Review and Industrial Strategy. As the Taskforce continues to gather input from industry and academic leaders, key areas of focus are becoming clearer, and ideas are being tested with stakeholders in preparation for the next phase. 

Our early observations highlight several key priorities: 

• Prioritisation of Industrial Strategy: there is widespread agreement that the UK needs a more focused approach to its industrial ambitions. While the Industrial Strategy provides a good foundation, it remains too broad and must be sustained for long-term effectiveness. Stability is key—shifting strategies hinder business engagement and investment. 

• Industry-Government Collaboration: stronger collaboration between industry and government is essential for ensuring long-term prosperity and driving innovation. A unified national strategy for wealth creation, co-led by both sectors, would position the UK for success in emerging industries like AI and clean energy, where regulatory innovation is a critical competitive edge. While there are already pockets of leadership in business innovation—such as in life sciences—there’s significant potential to build on these successes and create more cohesive, interconnected efforts across sectors. By fostering greater collaboration, we can unlock new opportunities for growth and global competitiveness. 

• Reform of the Publicly Funded Research System: the UK’s research system holds significant potential but requires reform. The system excels in world-leading research but needs to be simplified and streamlined to foster business-led R&D. Enhancing coordination, accessibility, and engagement will ensure the translation of research into impactful innovations. 

• Leveraging the university sector as a strategic asset: UK universities are seen by many businesses as a key driver for R&D investment, offering a wealth of talent and innovative ideas. Recent examples of strengthened university-to-university collaboration have played a pivotal role in attracting significant global private investment. However, there remains untapped potential to further strengthen these collaborations in alignment with national objectives. Financial sustainability challenges within the university sector continue to pose barriers, hindering even greater progress. 

• Addressing the Skills Gap: The UK must bridge the growing gap between traditional education pathways and the skills needed for modern, innovation-driven industries. To unlock the full potential of R&D, the future workforce must be equipped with the right blend of technical and business skills, ensuring that the UK remains competitive in the global innovation economy. Doctoral education is a critical component of the cutting-edge workforce, but numbers of doctoral graduates are declining.  

As the Taskforce moves forward, the next steps are clear: we must refine these ideas, test them with stakeholders, and build a strategy that not only supports R&D but also positions the UK at the forefront of global progress. Together, universities and businesses can turn today’s research into tomorrow’s game-changing solutions, driving growth, sustainability, and long-term prosperity.