What is R&D?
R&D is defined as creative work undertaken on a
systematic basis in order to increase the stock of
knowledge, including knowledge of man, culture and
society and the use of this stock of knowledge to devise
new applications. It includes basic research, applied
research and experimental development
1
. Innovation
often draws on R&D, but R&D is not always part of the
activity of innovation. An innovation is defined as the
implementation of a new or significantly improved
product (good or service), or process, a new marketing
method, or a new organisational method in business
practices, workplace organisation or external relations
2
.
What is the science budget?
Government investment in R&D is allocated largely
through the ‘science budget’. This is generally divided
into resource and capital. Resource spending isused
tocover the day to day costs of research, and also
provides research and innovation grant funding.
Capitalspending focuses mainly on investment in
infrastructure, such as laboratory equipment, setting
upworld class research institutes and or creating
innovation centres.
What is the science ring-fence?
The science ring-fence traditionally refers to ‘resource
spending’. Since 2015, the government has committed
to increasing the ring-fenced science budget in real
terms (in line with inflation). Capital spend, departmental
R&D, Innovate UK and other non-departmental funding
sit outside this. The science ring-fence provides
stability and a degree of certainty to funding decisions
which is crucial for research that spans decades or
evenlifetimes.
Key terms
Examples of R&D funding programmes
Development Funding
Global Challenges Research Fund (GCRF)
andNewton Fund
GCRF is a funding stream which aims to harness the
expertise of the UK’s research base to pioneer new ways of
tackling global challenges, in particular problems faced by
developing countries. The Newton Fund aims to develop
science and innovation partnerships to promote economic
welfare in collaborating countries. R&D which isfunded by
these schemes, but does not take place in theUK, is not
accounted for within UK domestic R&D investment figures.
Industrial Strategy
Industrial Strategy Challenge Fund (ISCF)
ISCF was created to provide funding and support to UK
businesses and researchers, to meet the major industrial
andsocietal challenges of our time. Six challenge areas
were named by the government in 2017 including
Healthcare and Medicines and Robotics and Artificial
Intelligence. UKRI will be responsible for the
implementation of ISCF.
Knowledge Exchange Funding
Higher Education and Innovation Fund (HEIF)
HEIF is designed to support the range of knowledge
exchange activities that result in economic and social
impact. The funding provides incentives for English Higher
Education Institutions to work with businesses, public
andthird sector organisations, community bodies and
thewiderpublic. The devolved administrations are
responsible for any equivalent funding to their HEIs.
Capacity Funding
UK Research Partnership Investment Fund (RPIF)
RPIF provides capital funds to enhance the research
facilities of UK Higher Education Institutions undertaking
world-leading research. It aims to do so through
strategicpartnerships between Higher Education
Institutions and other organisations active in research
including business. Applications must leverage public
fundsby a proportion of 2:1.
1. Frascati Manual: http://www.oecd.org/science/inno/frascatimanualproposedstandardpracticeforsurveysonresearch
andexperimentaldevelopment6thedition.htm
2. The Measurement of Scientific and Technological Activities: Guidelines for Collecting and Interpreting Innovation Data:
Oslo Manual, Third Edition, OECD (2005).
INVESTING IN UK R&D 2