The research capacity of the commercial sector is a crucial ingredient for enhancing the UK innovation system. The report shows that where firms in the UK invest in research and innovation, they are able to exploit the quality of the UK research base to support their innovative activities. Public investment in research can certainly complement private investment, but it cannot act as a substitute for it. There is strong evidence to show that the industrial capacity to exploit research in the UK has weakened in the 1990s, particularly in comparison to that in other countries and regions. The report explores the nature of the modern innovation process, locating the contribution of research to innovation.
Research supports innovation through a series of channels.
The report finds that innovation is becoming increasingly international in scope and that participation in networks of innovation requires substantial investment. Future policy should ensure that the UK has comparable per capita levels of support for research as other leading OECD countries.