Total business R&D spending was £17.4bn in 2011, eight per cent higher in cash terms than in 2010, and six per cent higher in real terms, the Office for National Statistics said.
The biggest gains came from a 19 per cent boost to the IT sector, and a 23 per cent hike in car industry R&D spend, as the country made its way toward becoming a net exporter of cars for the first time in decades. Spending in the defence and pharmaceutical sectors also accounted for a large portion of the increase.
The data provided a clear picture of how important foreign investment has been for recent UK economic success, with non-UK-owned firms spending more than half of the total on R&D for the first time ever. UK firms spent £6.4bn out of the total £8.7bn spent in 1993, while foreign-owned firms made up £8.8bn of the total £17.4bn spent in 2011 – ahead of the £8.6bn spent by businesses with UK-resident owners.