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OPINION

Research revolution

Research revolution
January 26, 2017
Research revolution

Brexit, it is argued, will only make this worse, wrenching the country from the academic research networks that underpin the capabilities that we do have, and simultaneously pulling the rug out from underneath our hugely important financial services industry. How the government responds to this double whammy is becoming a pressing question, and this week we had some answers in the form of the government's new green paper on the UK's industrial strategy.

It just so happens that the Masters degree I am currently studying for has now moved on to this very subject - and this is no coincidence. When I signed up to study the history of science, technology and medicine - add in engineering to complete the so-called STEM set - two years ago, I did so with the thought in mind that, towards patience with monetarism as the solution to the world's growth problems wearing thin, attention would shift to how to create national wealth through fiscally-led stimulation of enterprise and industry. And to understand where we may be heading, I felt it may be useful to fully understand where we had been. Within this historical context, it is easy to be critical of the green paper as nothing very new - it certainly echoes Harold Wilson's "white heat" speech of 1963 - and not far-reaching enough in its aims or funding. This is perhaps a little harsh. A look at government produced statistics reveals that the UK has indeed fallen behind some of its rivals in terms of R&D investment and any shot in the arm will help.

Conversely, a quick scan of the UK stock market reveals a much brighter picture, with many companies investing heavily in research, and marketing world beating technologies and science-based products. Yet the problem faced by stock market investors is that this does not make it any clearer whether there is, in fact, a positive relationship between the intensity of R&D and share price returns – a problem which matters at a national level, too. Plenty of companies have ploughed money into ultimately unsuccessful technologies, just as government support for science in the 1960s did not result in Britain regaining its position as the world's industrial and technological leader.

However, while investors may not reap the rewards overnight, a revitalised industrial policy should be welcomed - at the very least, it will further fertilise the environment in which the UK's already healthy crop of high tech sectors have flourished. And even if not definitively proven, there is at least some evidence to suggest that companies that invest in R&D do outperform over the long term.