Research and development spending

Research and development (R&D) refers to creative and systematic work undertaken to increase the stock of knowledge.

Total R&D

In the UK in 2019, total expenditure on R&D was £38.5 billion, £577 per head, or the equivalent of 1.74% of GDP.

R&D investment has risen steadily over the past few decades, from £20.4 billion in 1986 to the current total of £38.5 billion (in 2019 prices). This is a real terms increase of 96%.

But as a proportion of GDP, R&D expenditure has fallen over this period. It was the equivalent of 1.84% of GDP in 1985.

The Government has a target for total R&D investment to reach 2.4% of GDP by 2027. This target is discussed further in our briefing on R&D funding policy.

Sectors funding R&D

The business sector is the largest funder of R&D performed in the UK. In 2019, it funded £20.7 billion (54%) of R&D.

Public sector funding for R&D was £10.45 billion in 2019, 27% of the total. The higher education sector was the largest recipient of public sector R&D funding. The Public sector includes the UK Government and devolved administrations, UK Research & Innovation and the devolved higher education funding councils.

Sectors performing R&D

The business sector performed R&D worth £25.9 billion in 2019, 67% of the total. Most of the funding for this R&D came from the business sector.

The higher education sector performed R&D worth £9.1 billion, 24% of the total. The higher education sector receives most of its R&D funding from the public sector.

The public sector performed £2.7 billion of R&D in 2019, 7% of the total.

R&D by region

In 2019, R&D performed in the South East of England was worth £9.1 billion. This was equivalent to 20% of total UK R&D and the highest of all countries and regions. R&D performed in the South East, the East of England and London accounted for 54% of all UK R&D.

Per head, R&D expenditure in the East of England was the highest at £1,106 per head in 2019. The figure for the whole UK was £577 per head. In Wales, R&D expenditure was £252 per head.

R&D employment

There were around 486,000 full-time equivalent R&D-related roles in the UK in 2019. Of these, 65% were researchers, the remainder were technicians and administrative staff that directly contribute to research.

Around 56% of R&D roles were in UK businesses, 39% were in higher education (including graduate students), 3% in the public sector and 2% in private non-profit organisations.

International comparisons

The UK R&D expenditure of 1.7% of GDP is below the OECD average of 2.5% in 2019.

R&D expenditure in Germany was the equivalent of 3.2% of GDP in 2019, in the US it was 3.1% and in France it was 2.2%.

Top R&D performing companies

The world’s top three companies investing in R&D in 2019 were Alphabet (Google’s parent company from the USA), which invested £20.4 billion in R&D in 2019, Microsoft (from the USA), which invested £15.1 billion, followed by Huawei (from China), which invested £14.7 billion.

In the UK, the top company investing in R&D was GlaxoSmithKlein, a pharmaceuticals company, which invested £4.5 billion in R&D in 2019.