The amount the UK spends on research and development (R&D) has fallen in real terms for the second year in a row, new figures show.?

Total gross expenditure on R&D by universities, the government and businesses ¨C known as GERD ¨C amounted to ?72.6 billion in 2023, an increase of ?3.0 billion since 2022 and ?14.3 billion since 2018, ?figures released on 15 August.?

But sector groups have warned that this amounts to a?2 per cent decline in real terms.

According to analysis by the National Centre for Universities and Business (NCUB), total R&D spending is now down by more than 4 per cent since 2021 ¨C a real-terms reduction of ?2.8 billion.

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The UK¡¯s GERD previously fell by 2.1 per cent in real terms in 2022.?

ONS figures show the business sector accounted for the largest share of R&D expenditure in 2023 at ?50 billion (69 per cent of the total), followed by higher education at ?17.1 billion (24 per cent of the total), but both these sectors spent less in real terms than they had previously.?

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UK Research and Innovation (UKRI), the UK¡¯s main research funder, has been charged with increasing private sector investment in R&D, but the agency has been criticised by politicians for the lack of data available about whether this has actually happened.?

Government spending accounted for 6 per cent of total spending in the UK at ?4.3 billion, while the private non-profit sector spent the least of the groups at ?1.1 billion (2 per cent of the UK total).?

¡°This fall in R&D spending should be seen as an early warning sign,¡± said Rosalind Gill, NCUB¡¯s director of policy.?

¡°While the figures reflect 2023 activity, they point to pressures that, if left unaddressed, could hold back the UK¡¯s long-term growth ambitions.?

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¡°Preliminary OECD data shows that between 2021 and 2023, the UK recorded the worst growth in R&D spending among the G7, signalling a concerning divergence from our international competitors.¡±

The government¡¯s industrial strategy, published earlier this year, set out the plans to pivot research funding to focus on eight key growth areas.?

¡°At a time when the government has placed science, skills and innovation at the heart of its economic strategy, ministers must work with business and universities to reverse this trend,¡± Gill said.

¡°That means committing to a clear, long-term plan for R&D investment, targeting funding towards high-growth sectors such as advanced manufacturing, life sciences and clean technology, and providing stable policy signals and actions to unlock private investment.¡±

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helen.packer@timeshighereducation.com