British companies may appear to have deep pockets and short arms when it comes to spending on research and development. But the home-grown talent that we have in Britain in the form of research scientists and engineers has not gone unnoticed by overseas companies.
Latest Government statistics confirm that increases in funding for R&D from overseas firms and those on mainland Europe are the biggest engines in R&D growth – accounting for £2.0bn of total R&D spending in Britain last year, or more than a fifth of the total.
Meanwhile, overseas companies continue to flood into the UK to set up development bases. US software giant Computer Associates’ decision to create a £100m European headquarters near Slough, Berkshire, follows hard on the heels of that of Microsoft to build a £50m research base in Cambridge.
While the level of overseas funding has been rising, the amount of cash coming from the British Government to fund research has been declining, mainly the result of falling budgets for defence projects.
But at least the Government seems to have found itself a new kind of role that could promote more R&D in Britain.
The Foresight Vehicle programme, unveiled earlier this month, may sound peripheral to many engineers, once you compare the paltry £5m the Government is putting behind the scheme with the hundreds of millions of pounds spent by any car manufacturer on the development of a standard family car, let alone the innovative car of the future.
But that is not the point. Programmes like Foresight aim to provide a focus for links between industry and universities, something everyone has been talking about for years but which very few people have been actually doing.
The aim of that is now becoming clear. One of the advisers to the Government’s Foresight programme made it explicit to us that these kinds of links, and the benefits they will have on the scientists and engineers taking part, could make Britain even more attractive to overseas investors.
Until now, this Government, and its predecessor, has freely tried to entice overseas manufacturing capacity into this country. Now it seems to have acknowledged that in R&D too, it is overseas investment that will be the most likely to unlock Britain’s potential for innovation and high technology.
We would probably all wish that it were UK companies’ cash doing this job for Britain. But as long as British companies hold back, and a pool of undervalued expertise remains in science and engineering, we should welcome overseas companies with open arms.