UK chancellor Rishi Sunak’s moves, outlined in the Spring Statement, to improve the effectiveness of research and development are timely. The UK trails others when it comes to spending in the innovation labs and drawing boards. Spending on R&D at the top-ranked 2,500 companies worldwide rose 6 per cent in 2020 to €908.9bn, according to the European Commission’s latest investment scoreboard — even as capital expenditure and sales dipped.
To be sure, R&D’s big spenders are a more cosseted bunch. Closed schools, offices, shops and cinemas played into the hands of tech companies such as Alphabet, which leads the pack spending $27.6bn, or 15 per cent of sales, in 2020.
The tech sector is more geared towards ideas than factories. Alphabet’s spend was a quarter above its capital expenditure. Lines tend to blur. Equipment costs can frequently go in either bucket. Amazon, which bundles up “technology and content” at $42.7bn, is perforce excluded from the commission’s scoreboard.