Scotland business

Research and development investment falls

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Business investment in research and development in Scotland has fallen, when it was already very weak.

It contrasts with relatively high levels of research and development (R&D) throughout Scottish higher education.

The figures, for 2015, have been published by the Scottish government.

They confirm previous patterns showing that private sector research is a significant weakness within the Scottish economy.

The Scottish government aims to increase R&D, as it is linked to improving productivity, economic growth and quality employment.

However, the gap remains stubborn. While total spend was reckoned to be 1.46% of national output in 2015, the UK figure was 1.68%.

The EU remained at 1.95%, while the benchmark of the Organisation for Economic Co-operation and Development (OECD) average was 2.4%. Germany had twice the level of Scotland.

Private sector R&D investment stood at £871m two years ago, a £9m fall in real terms from 2014. It rose in the previous two years.

On that private business measure, Scotland had half the level of spending per head of the UK as a whole.

Higher education

It was among the lowest quarter of developed nations' economies, within the OECD.

Higher education R&D reached £1,092m. As a share of national output, it was fourth highest in the OECD rankings, after Denmark, Switzerland and Sweden.

While business R&D had risen 27% since 2001, higher education R&D rose at twice that pace, when it was already relatively strong.

Government spending on R&D in Scotland, including through the UK research councils, reached £155m in 2015. That was the same in real terms as 2014. It represents a 14% real terms drop since 2001.

Among the 12 nations and regions of the UK, Scotland ranked fourth for government spend on R&D.

Measuring total R&D as a percentage of national economic output, the UK was just below the mid-way point in a list of OECD countries. Scotland was positioned below that, between Estonia and Hungary.

The highest proportionate spend was in Israel, South Korea, Japan and Sweden.

Total R&D spend per head in Scotland was £400 in 2015, while the equivalent figure for the UK was £486. In the east of England, it reached £894, while Wales had only £214.

The business measure is drawn from a survey of 5,400 UK companies known to be spending money on research and development activities.

R&D is defined as involving "creative and systematic work to increase the stock of knowledge", with "an appreciable amount of novelty". It does not include market research, most software development, routine testing or quality control.

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