Governmental investment in R&D is higher than ever. What does it all mean for innovation?

Governmental investment in R&D is higher than ever. What does it all mean for innovation?

It’s no exaggeration to say that innovation will be key for the UK’s economic recovery in the post-pandemic world. So, the fact that the BEIS (department for business, energy and industrial strategy) is investing more money than ever into research and development this year is a sigh of relief.

On top of the Government’s £14.9bn investment in research and development, the BEIS have allocated a huge £11.35bn to R&D this year, which is nearly a 10% increase in comparison to 2020/21. Not only will this help to pave the way for economic recovery, but it will contribute towards the UK’s net-zero strategy, advancement of medical research and help collaborative research continue post-Brexit.

The department will be publishing their innovation strategy in the weeks to come, but for now, we’ve summarised some of the stand out allocations below…

Investing in ARIA

£50m of BEIS’s budget will be dedicated to the Advanced Research and Invention Agency (ARIA) - a new independent agency which the government will be launching later this year.

Led by scientists, ARIA will fund high-risk, high-reward research, and could bring pioneering services and technologies to life in the coming years, whilst also creating a ream of highly-skilled jobs.

Engagement with businesses with be crucial to the success of the agency, to ensure new ideas, technologies and services which have been developed through ARIA, are brought to the marketplace. Equally giving businesses across the UK the opportunity to actively participate in the innovation process by helping to bring ground-breaking ideas to life.

Working towards a Green Industrial Revolution

Recent research by the independent Climate Change Committee suggested that Britain is extremely underprepared for the impact of climate change, and highlighted the need for the Government to take action.

This only further emphasises the importance of the BEIS’s investment in the advanced nuclear fund, hydrogen heating technologies and the Net Zero Innovation Portfolio.

The latter of which will fund projects throughout the UK and Northern Ireland, focusing on everything from decreasing the costs of decarbonisation and commercialising low-carbon tech and systems, to future offshore wind and bioenergy. BEIS have launched and will be launching a series of competitions for businesses to apply for funding through the scheme, throughout the year.

While this investment is a step in the direction towards tackling climate change, further investment into innovation will be vital as we work towards a green industrial revolution and aim to achieve a net zero society by 2050.

New horizons post-Brexit

In the wake of Brexit, the BEIS has committed funds to secure participation in Horizon Europe. Horizon is the EU’s R&D membership programme and with a budget of €95.5bn, the programme bolsters the impact of innovation.

A further breakdown of the costs and clarification over collaborations with European partners will be coming in the next few months. But what we do know is that from the UK’s point of view, membership to Horizon Europe will allow scientists, businesses, and researchers access to and reap the rewards of the largest collaborative research programme in the world.

R&D Tax Relief

As we look towards a post-Brexit, post-pandemic landscape, the need for innovation is only becoming more prominent. And whilst the Government’s record-breaking investment is a step in the right direction, providing a real incentive for businesses to actively participate in R&D activities, funding applications and opportunities can be highly competitive, and not accessible to all.

This is when Research and Development Tax Relief can be a lifeline. For qualifying businesses who are investing in forward-thinking ideas, whether it’s developing ground-breaking technologies, or advancing processes that already exist, the relief can be invaluable. 

From assessing your eligibility to submitting your claim, our tax incentives and reliefs team are here to support you throughout the claim process. Get in touch to see how we can help.