Annual research and development (R&D) spending in the telecoms sector has risen 4.5% to a nine-year high of just over £1 billion (€1.18 billion), according to ONS data released on Friday.
R&D spending across telecommunications businesses in the UK climbed £44 million (€52.15 million) to £1.02 billion (€1.21 billion) in 2020 having risen for three years in succession, analysis by R&D tax relief provider Catax shows.
However, the industry is unusual in that it hasn’t grown its R&D spending at all over the past decade. The amount the industry spends on R&D has shrunk £101m (€119.72m) or 8.9% since 2010 when it registered £1.13bn (€1.34 bn). It now makes up 3.8% of total UK R&D spending.
By comparison, across all sectors, UK R&D spending grew 3.5% last year to a record £26.9bn (€31.88bn). This was a rise of 67.9% since 2010.
The number of people employed by all UK businesses in R&D roles also reached a record high last year, climbing 6.8% to 283,000 full-time equivalents an 83.8% rise since 2010.
The UK Government has set a target to bring UK R&D spending up to 2.4% of GDP by 2027. It is currently running at 1.7% of GDP according to the latest ONS figures.
Mark Tighe, CEO of R&D tax relief specialists Catax, says, “The telecoms sector is an unusual outlier in R&D terms. It has not grown its innovation spending at all in the past decade, which is alarming even if it has outperformed in growth terms over the past year.
“Things have been improving since 2018, however, and with 5G infrastructure, gigabit and satellite broadband demanding so much attention, the stronger growth of the past few years should continue to push R&D spending to new highs.
“A significant portion of this spending will be earning those companies responsible millions of pounds in R&D tax credits which can be reinvested straight back into R&D,” Tighe concludes.
Comment on this article below or via Twitter: @VanillaPlus OR @jcvplus
