A further period of opportunity for the UK’s science parks and campuses lies ahead, if, the country can capitalise on its potential, says Bidwells Research Director Sue Foxley.
YouGov, on behalf of Bidwells and Creative Places, has recently completed a major survey of large R&D companies to understand their requirements and preferences as they look ahead to plans for the future. The results of this survey and common sense point to a period of opportunity for the UK if its able to capitalise on the economic potential ahead.The organisations surveyed by YouGov were significant players, with widespread international representation. Over 80% of organisations employed more than 1,000 people globally while their focus stretched across business sectors, including pharmaceuticals, agri-industry, chemicals, energy automotive and aerospace. All had R&D representation in the UK. While London and the South East accounted for half of R&D activities for those companies surveyed, the spread of activity was nationwide.
The survey results point to a strong global growth story for the R&D industry. Over half of organisations reported increased expenditure on R&D over the last five years. The UK story bears this out. Bidwells’ research estimates turnover in the UK life science and healthcare sector will have grown by 28% over the last five years by the end of 2018 (Cai & Bidwells, 2018). Across the Bidwells’ market area, the real estate reality of this growth is evident in the growth of science parks and campuses across the Oxbridge Growth Corridor.
The latest ONS statistics of R&D spending underline this growth. Spending in the UK continued to grow in 2016 to reach a new record high. As a proportion of GDP however we ranked 11th all EU countries. The current political and economic uncertainty associated with the Brexit unknown has potentially weakened our position further. Business investment has slowed over the last 12 months, most notably in Q2 with a fall of 0.7%. This was a marked downward revision of the early estimate.
Perhaps the more telling finding of our previously mentioned research (Cai, 2018) suggests a slowing in the turnover of the life science and healthcare sector this year. The analysis finds net capital expenditure by businesses to be the key driver in the turnover growth of the sector. When business investment slows, as it has over the last year, turnover will follow suit.
This is a warning. No matter what the eventual form Brexit takes, it is essential for the UK’s economic future that we capitalise on the global growth potential of the R&D intensive companies by providing the foundation for business innovation.