CBI: firms set to miss R&D investment target by £19 billion

The Confederation of British Industry (CBI) has urged the Government to “turbocharge” the current programme of research and development (R&D) tax credits, in order to help the UK meet its R&D investment target by 2027.
In its recent report, ‘Untapped Investment’, the CBI said that ensuring the R&D tax credit keeps pace with the changing nature of R&D and the UK’s international competitors will help spur private sector investment to close this gap.
According to the report, business investment in R&D is helping to tackle the biggest issues of the current generation, from climate change to the future of transport. Moreover, the tax credit has proved to be effective in spurring private investment, for example, in 2016-17, Government incentives cost £3.4 billion but brought in £24.9 billion of expenditure.
This year, the Government set an ambitious target for raising R&D investment to 2.4 per cent of the UK’s gross domestic product (GDP) by 2027, which is considerably higher than the 1.8 per cent businesses currently spend.
However, the CBI claims that at current rates of investment, the Government would not reach its target until 2053. Moreover, it wants the Government to widen the scope of eligibility for the R&D tax credit, to include capital expenditure, the outsourcing of R&D activities, where this is not already captured, and the upskilling and retraining of staff.

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