Today the National Centre for Universities and Business (NCUB) publishes new analysis on how the UK attracts international investment in research and development (R&D).

The analysis looks at UK regional performance in attracting foreign investment into R&D and suggests actions to win more overseas investment.

The new analysis reveals:

  • The UK attracts an exceptional share of research-intensive foreign investment disproportionate to its size, however, there is underutilised potential to attract even more of this type of investment;
  • In 2021, the majority of UK expenditure on R&D was made by business (£46.9bn). Of this amount, some £16.4bn came from business with overseas ownership, representing over one third of the UK total expenditure;
  • The United States, Japan and China are the primary source markets for foreign investment in UK R&D.

Dr Joe Marshall, Chief Executive of NCUB said: “Countries around the world are investing in R&D and are sending positive signals to global business to invest with them. In the UK, expenditure on R&D by businesses with overseas ownership is significant. To protect and grow this investment alongside increased investment by domestic businesses, the UK needs to ensure that its offer is co-ordinated, coherent and effectively communicated. We must behave as a competitor in the global market for R&D investment. Working to ensure that its benefits are felt across the UK.”

Marshall concluded: “Although the UK draws a significant amount of international investment, now is no time for complacency. If the Government is serious about growing the UK economy through greater research and innovation, we need to see a fundamental step change in levels of private R&D investment into the UK from overseas. However, despite various strategies, reviews, incentives and policies, private R&D investment is broadly flatlining. Understanding the drivers of foreign R&D investment, and designing policies and communications accordingly, is essential to future prosperity and progress.”

Read the report in full here, and the additional supporting evidence reports here and here.