Research and Development

2.83 Research and Development ( R&D), successfully commercialised, is an effective way of creating competitive advantage and can translate into considerable productivity gains. In 2003, total expenditure in the region was approximately £1.8 billion, equating to 10% of the English total. Regional R&D expenditure grew by 33.4% in nominal terms in 1999-2003 compared to 19.6% nationally.

2.84 In 2003 the South West spent proportionately more on R&D as a percentage of GVA than the England average. Only the East and South East regions spent more as a proportion of GVA. Expenditure regionally, was made up of 76% from the business sector, 13% from the Government sector and 11% from the higher education sector.

2.85 R&D expenditure rates were greater regionally than nationally in the business and Government sectors but below the national average for the higher education sector. The Government’s drive to concentrate higher education research capacity in fewer numbers of centres of excellence may further impact negatively on South West research institutions. Overall, regional R&D rates rose by 8.8% in 1999-2003; increasing the proportion the region spends on R&D from 2.3% to 2.5% of GVA.

2.86 Business sector R&D expenditure data is available up to 2006, at which time businesses in the region invested £1.3 billion in R&D, 9.8% of business R&D spend across England. This is 1.5% of regional GVA, slightly higher than the England average of 1.4%. The South West had 14,000 FTE employees in R&D in 2006, 10.3% of England’s figure.