It is a genuine pleasure to follow the Chair of the Science and Technology Committee. The manner in which she is steering that
Committee towards practical added-value recommendations is exemplary and superb, and the manner in which she steered the House through her recommendations this afternoon was astonishingly good, too. I am in the weird position of agreeing with every word she said, so I will not take too much of the House’s time.
The hon. Lady was particularly strong, if I may say so, when she spoke about what a pivotal role science plays in future economic and productivity growth, and given my Select Committee’s priorities, I was particularly interested in her point about start-ups. It is relatively easy to start a business in this country, but scaling that up so that we have very large, innovative and successful firms employing a large number of people is a major challenge for this Parliament. I hope that our two Select Committees can work together closely to provide the join-up that is needed.
The hon. Lady mentioned that science has never been more crucial to our status as a modern economic nation. I agree. We need innovative and successful firms creating wealth and employment on the back of science and research and development. We are here now, in the 21st century, on the cusp of the fourth industrial revolution: the first, in the 18th century, used water and steam power to mechanise production; the second, in the early 20th century, used electric power to create mass production; the third, in the late 20th century, used electronics and information technology to automate production, unleash digital and revolutionise the means of communication.
This fourth industrial revolution, moving at an exponential pace, is astonishing. The technologies that this revolution is unleashing, such as the internet of things, autonomous vehicles, materials science, nanotechnology, biotechnology, energy storage, artificial intelligence and quantum computing, will disrupt almost every industry in almost every country, and will disrupt society as a whole. Science and technology are the foundations of this revolution, and the choice in the future will be stark. Countries that embrace and invest in science will be the winning nations of the future; those that do not will fall behind in economic growth and living standards.
This is why, as the hon. Lady pointed out, it is a matter of concern that we have lagged behind spend by our competitors on science and research and development for much of the past 30 years. As she said, what we do spend, we seem to spend very efficiently and effectively. We punch well above our weight, but we need to think about the volume of that value, as well as what we are doing with it. We have spent just over 2% of GDP on R and D just once in the past 30 years. That was in 1986, and we have never again reached that level. Spend has declined steadily over that period to reach a long-term average of about 1.6% or 1.7% of our GDP. We are below the EU average for R and D spend as a proportion of our economy.
The Russell Group has pointed out that in terms of the level of R and D intensity of the top 22 countries listed by the OECD, the UK has the lowest level of investment. Our investment has declined, while our competitors such as Korea, Germany, the US and even Japan have increased the share of their economy spent on research and development. As is mentioned in the hon. Lady’s report, Imperial College London has said that our investment as a proportion of GDP is about 1.72%, but China increased its share of R and D investment from 1.3% in 2005 to 1.98%; France increased
its share from 2.11% in 2005 to 2.26% in 2012; and Germany increased its share from 2.51% in 2005 to 2.92% in 2012. The US also increased its investment in the same period from 2.51% of GDP to 2.79%. Imperial College, giving evidence to the hon. Lady’s Select Committee, said that the choice was stark:
“Without increased investment in R&D, therefore, the UK risks losing its position at the forefront of research globally, particularly given the rapid rate of advance in scientific research and the intense levels of international competition.”