'Lack of research and development is holding Yorkshire back' - new report reveals

Britain's largest business organisation has warned that a lack of investment in the multi-billion pound research and development industry is holding back the Yorkshire and Humber’s economy and preventing the region becoming a global leader in the sector.

CBI Director-General Carolyn Fairbairn.
CBI Director-General Carolyn Fairbairn.

The CBI has highlighted the huge opportunity for the region as its Director-General Carolyn Fairbairn launches a ground-breaking report at the opening of Reckitt Benckiser’s (RB) £105m Science and Innovation Centre –marking the biggest single investment in the company’s history.

The global consumer health and hygiene firm has created 200 jobs by opening the state-of-the-art centre and will also spend £95m to upgrade the manufacturing facilities on the Hull site which employs 1,400 staff.

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The CBI’s Don’t wait, Innovate report published today highlights the businesses across the UK which are undertaking pioneering research, development and innovation in areas from aerospace to agriculture.

But it also reveals not enough research and development is currently being undertaken in the UK – risking progress on achieving the target of 2.4 per cent gross domestic product (GDP) spend by 2027, and the longer-term aim of three per cent.

The CBI’s innovation and digital director, Felicity Burch, said: “For centuries, the UK has been a home for global innovation.

“Scientific progress has not only transformed our economy, it’s been the single biggest driver of productivity and helped tackle some of our society’s biggest challenges.

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The UK currently spends 1.7 per cent of GDP on research and development – far below the 2.4 per cent OECD average – and national investment is particularly limited outside of the South-East.

Just three regions – London, the South-East and East of England – account for 52 per cent of UK research and development spend and only five of the UK’s 40 sub-regions are investing more than three per cent of GDP. The Yorkshire and the Humber region invests less in research than 17 other sub-regions in the UK.

A greater focus on accelerating research and development investment in the worst performing regions could provide a £7.3bn boost to UK spend, bringing the 2.4 per cent target for research and development spend within grasp.

The report argues the UK must capture the benefits that flow from improving innovation-led growth across the country, by creating a new regional network of Catapult Quarters across the UK.

These would encourage industry to collaborate regionally on the key challenges that face the country – such as clean growth, healthy ageing, the future of mobility and AI – with targeted and practical support.

The CBI’s regional director for Yorkshire and the Humber, Beckie Hart, said businesses and the Government need to work together to unleash the potential of the nation’s towns and cities.

She said: “By running with this agenda, business and government can in partnership unleash the innovative potential of towns and cities throughout the UK.

“Throughout the Yorkshire and the Humber, there are already a wealth of successful stories of companies coming together in their regions to the benefit of society and the economy.

“Imagine – if research and development spending increases to at least three per cent of GDP and Catapult Quarters are created – how much further could the UK grow its successful innovation-based economy and break ground on the grand challenges of our time.”

The Northern Powerhouse Partnership has stressed that the regional imbalances in research and development funding was highlighted at the inaugural Great Northern Conference which was staged in February.

The partnership’s director, Henri Murison, said: "We made clear the need to grow R&D spending nationally and use this opportunity to close the North - South divide which exists in public investment in this activity, despite the work of those like the High Value Manufacturing catapult which the AMRC in Sheffield is part of.

“My concern with the CBI’s policy proposals made here, is they do not adequately highlight the priority to link up clusters as the Royce Institute in advanced materials does, linking assets from its base at Manchester University to Sheffield and in Liverpool, or the Nuclear AMRC which has extended its reach from Sheffield with additional capabilities located in Birkenhead, for instance.

“We need to be doing R&D here in the north to help rebalance the country, and catapult quarters will not have the scale unless scaled up on a pan Northern basis for us to be as globally significant as Singapore in many key fields has become for instance. At Northern Powerhouse Partnership we expect innovation and R&D to be central to either a Labour or Conservative governments approach to closing North - South divide.”