David Tomkin, director of Company Reporting, which compiles the R&D Scoreboard's annual figures for the Department of Trade and Industry, warned of a widening gap between the UK and other countries. The UK is already bottom of the 'big five' that includes the US, Japan, France and Germany.
"We're being edged out," he said. "The international average spend [on research] increased 12 per cent this year. The UK's went up just 6.2 per cent." It is a worrying sign that is leaving British firms behind in the global market. "We need a really significant change in mindset to get up to a global standard."
Of the FTSE 100 companies, 51 failed to invest at all in R&D. Brian Lever, adviser to the DTI, points the finger at "middle ground" companies. "We've got some good companies at the top of the heap -- telecommunications, pharmaceuticals, and so on," he said, "and some exciting new entrants in the hi-tech fields. But you guys in the middle ground have got to be focusing on a global market. There's nowhere local to hide any more."
Solutions are few to the expanding problem, but Tomkin suggested America's fluid relationship between academia and venture capital was playing a large part in the encouragement of new ideas. "The venture capital environment isn't working to our best advantage. The government could take a more hands-off approach," he said, pointing to lack of incentives for new businesses, and the penalties that entrepreneurs risk if they fail.