Britain failing to turn research into profits, warns EU report

Technology research in the UK is failing to produce real gains for industry, according to a European Union report. More needs to be done if there is any hope of the UK and other EU countries winning the race against the US and Japan to capitalise on innovation.

According to the EU research directorate’s Science Technology and Innovation Key Figures 2000, EU states do well in their share of innovation output measured by scientific publications worldwide.

But in patents, the first stage to the realisation of profit from any research, European countries are losing out.

The US and Japan hold a substantially greater proportion of patents in Europe than European companies hold in the US and Japanese systems.

The UK has the third highest number of patents among the 15 member states, but that position is under threat from a declining base of funding and manpower. UK research spending declined between 1990 and 1998.

The situation for the EU is not helped by the fact that member states have fewer researchers as a proportion of their countries’ workforces than the US or Japan. Meanwhile, Japan and the US — after several years of decline — saw a steady increase in research and development spending between 1994 and 1999.

For research and development expenditure and venture capital investment, the key indicators for European countries show stagnation during the 1990s, with spending at around 1.8% of GDP.

In venture capital investment, Britain is worse off still, currently stuck at the bottom of the EU league for seeding and expansion funds.

The good news for many EU states is that in 1999, the high-tech sectors contributed significantly to growth and employment. These sectors only provide 20% of jobs but the rate of job growth is double the average for the manufacturing and service sectors. But in the UK jobs declined in the high-tech and manufacturing sectors, and growth in the service sector was low compared to the the other 14 EU countries.