Revamped ONS Survey Reveals Underestimation in UK’s R&D Investment
In a significant revelation by the Office for National Statistics (ONS), the value of research and development (R&D) activity in Britain has been considerably underestimated. A redeveloped survey indicates that the actual figures could surpass current estimates by over 20 percent. This discovery sheds new light on Britain’s economic landscape, particularly regarding its investment in innovation.
The revised Business Enterprise Research and Development (BERD) Survey reported that R&D spending in 2022 reached approximately 53.0 billion pounds, a stark contrast to the previously estimated 43.4 billion pounds. This 22 percent increase highlights the critical role of R&D in contributing to gross fixed capital formation, a key indicator of investment within an economy that encompasses business and government spending, alongside infrastructure development.
Historically, Britain has struggled with R&D investment, often trailing behind its G7 counterparts. According to the Organisation for Economic Co-operation and Development, the UK ranked last among the G7 nations in terms of gross fixed capital formation as a percentage of economic output, at just 18 percent in 2022. However, the ONS’s latest findings suggest that Britain’s investment landscape might be more robust than previously thought, provided that other nations do not adjust their R&D measurements in a similar fashion.
The ONS highlighted that improvements to the BERD Survey, which now incorporates responses from a significantly expanded pool of 38,500 businesses up from 5,400, could enhance the perceived level of R&D within business and overall economy investment. Preliminary analysis suggests that this adjustment might increase the level of business investment by 3.9 percent, although its impact on overall economic output would be more modest.
Despite these encouraging early insights, the ONS has indicated that the full implications of these revised R&D estimates will not be fully understood until an annual review of the British economy is conducted in 2025. Until then, these preliminary findings offer a promising outlook for Britain’s commitment to research and development as a driving force for economic growth.
