Scotland business

Scotland lags UK in business R&D investment

Researcher
Image caption R&D investment at higher education institutions reached more than £950m in 2011

Business investment in research and development (R&D) in Scotland has continued to lag well behind that in the rest of the UK, according to new figures.

An annual report by the Scottish government showed Scotland accounted for only 4% of private business R&D spending in the UK during 2011.

The total was £689m - a real terms increase of £54m on 2010.

The increase of 8.5% was less than half of Scotland's population share.

At the same time, R&D spending by higher education institutions, at £953m, was well above the 8.4% population share, at 13.4%.

And a measure of government spending on R&D, at £283m, was 12% of the UK total. It fell by £20m on 2010.

The low spend by private businesses was underlined by the calculation that it represented only 0.56% of Scotland's gross domestic product during 2011.

For the UK as a whole, it represented 1.14% and for the European Union, it stood at 1.2%.

In total, gross expenditure on R&D in 2011 was £1934m, which was 7.1% of the UK total.

'Deserved reputation'

Andrew Walker, corporate partner at law firm HBJ Gateley, said Scotland had a deserved reputation for producing great innovation, but the latest figures suggested that investment in R&D was "relatively poor".

"A lot of companies conduct R&D elsewhere in the UK, but we have a tremendous network of academia, entrepreneurs and active investors which make Scotland a very attractive place to innovate," he said.

"A clearer understanding of the support available in Scotland to companies which invest in R&D and create exciting, flourishing businesses would go some way to attracting more of them to Scotland, and the knock-on benefits that would bring.

"The decreases in the government and higher education figures underline the need for stimulus in business R&D expenditure."

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