MINISTERS could boost the UK economy by £30bn within the next decade if they offer more tax-related incentives for firms to invest in research and development, a study from the Confederation of British Industry says today.
The lobby group said raising the amount spent on R&D to three per cent of GDP, widening R&D tax credits and doubling investment into UK agency Innovate UK would create 500,000 more jobs.
It has called on ministers carry out a review into procurement.
“The molten metals of manufacturing have long coursed through the veins of our economy. Optimism within industry is now rising at a strong rate, and investment intentions are on the up,” CBI deputy director-general Katja Hall said.
“But it’s time for some fresh thinking. We need to see a bold strategy that breathes new life into our supply chains, and makes the UK the destination of choice for manufacturing high value products.”
The group commissioned consultants from AT Kearney to author a report into the UK’s industrial strategy after concerns about the UK’s supply chain strategy.
They said widening R&D tax credits to later stages of the research phase when products are in commercialisation and development would help encourage more work by small and medium-sized enterprises.
“This report shows that the most important factor in supply chain location decisions was service/innovation scoring 36 per cent, with total cost next at 30 per cent,” AT Kearney partner Charles Davis said.
France’s investment in R&D currently outstrips the UK’s by 40 per cent.