THE LATEST FIGURES FOR R&D EXPENDITURE SHOW A ￡2.3BN RISE TO ￡37.1BN IN 2018. THIS EQUATES TO 1.71% OF GDP. WHILE THIS SEEMS PROMISING, PROGRESS HAS REMAINED FLAT OVER 30 YEARS. Research and development (R&D) expenditure rose by ￡2.3 billion to ￡37.1 billion in 2018; this is an increase of 6.6%, which was larger than the 4.8% growth in 2017 and the largest annual rise since 2013. The Government's Industrial Strategy includes a target to raise investment on R&D to 2.4% of gross domestic product (GDP) by 2027. UK R&D statistics are used to assess how sectors of the economy are contributing towards reaching this policy goal. In constant prices (adjusted to remove the effects of inflation), the 2018 estimate surpassed 2017's previous high by ￡1.6 billion, an increase of 4.6%. With an average annual growth rate of 2.0% since the 1990 level of ￡21.0 billion, the long-term upward trend, in constant prices, is still evident. In current price terms, the UK spent ￡558 per head of population in 2018; this is an increase of 6.0% compared with 2017 and 172.7% from ￡205 in 1990. UK gross domestic expenditure on R&D as a percentage of gross domestic product declined steadily between 1990 and 2004, from 1.73% to 1.50%. Since then, the percentage has fluctuated between 1.52% and 1.71%, showing a gradual upward trend. The 2018 estimate of 1.71% of GDP was up from 1.67% in 2017 and above the average of 1.61% for the period 2005 to 2018. However, Mark Smith, partner for innovation incentives at Ayming UK, commented: "At 1.71% GDP, the UK is still a long way off the its target of 2.4% by 2027. It was encouraging to see the Government put such a strong emphasis on R&D as a mechanism for stimulating the economy in the Chancellor's Budget last month, but we still have a way to go."
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