UK flounders behind Iceland, Luxembourg and Denmark for University R&D spend

The amount Britain’s universities are spending on research and development is being dwarfed by their European neighbours, according to analysis of OECD data by R&D tax specialists Catax.

The UK spends 0.42% of its GDP on university-based R&D which translates to just £3,587 for each of the country’s 2.3 million students in higher education¹.

Incredibly, this is only 11% of the amount that first-placed Switzerland spends (£31,192) and 26% of runner up Singapore’s (£13,403) investment.

The Scandinavian countries are also towards the front of the pack for R&D spend per student – Denmark, Sweden and Norway all feature in the top ten.

Britain places 17th in the table of 42 countries and is outstripped by economic minnows like Iceland which, despite having an economy 130 times smaller than ours, manages to invest  £5,401 per student in university R&D. It’s a similar picture for Luxembourg (£4,630) which, despite having an economy just 2% of the size of the UK’s, still manages to spend 29% more per student.

These figures will fuel concerns that Chancellor Philip Hammond’s plan to put R&D at the centre of the UK’s new ‘stronger, fairer, more balanced economy’ isn’t being fully realised.

However, the UK is ahead in comparison to global superpowers, with China and Russia spending only £345 and £225 on R&D per university student and the US allocating just 70% (£2,541) of that spent in the UK.

Meanwhile the Catax analysis has also exposed a potentially significant correlation between R&D spend per student and the Human Development Index, which is calculated by combining the major indicators of health, education and income.

Switzerland, ranked highest on R&D spend per student, is second on the HDI with a score of 0.939. In fact, five of the top-ranked countries for R&D spend per student – Switzerland, Norway, Denmark, Singapore, Iceland – also feature in the top 10 for HDI².  

TABLE: Top 10 university R&D spend by country

Mark Tighe, CEO, Catax comments:

“Universities are the engine rooms of innovation with the potential to cement Britain’s reputation as a global powerhouse as we exit the European Union. This analysis demonstrates how smaller countries are punching above their weight when it comes to R&D funding, leaving Britain in their wake.

“The UK’s universities are world renowned, and for good reason, but there is a risk that they aren’t being given enough of an opportunity to innovate. Investing in our brightest young minds is something worth doing, and quickly.

“Given the government’s claim that the UK is leading the technological revolution with high value R&D investment, it is alarming how far the UK trails behind.”