NI is not getting the R&D funding that it deserves

The UK is among the most geographically unequal countries in the industrialised world in terms of regional economic performance, and disparities in productivity closely align with disparities in research funding.

Universities can contribute enormously to regional industrial growth by commercialising their research yet those outside the southeast are not receiving a fair bite of the research funding cherry. For example, in terms of turnover generated by university spinouts, Northern Irish universities come second only to those in Oxfordshire.

Yet Northern Ireland receives a less generous HEIF (Higher Education Innovation Fund) than most other regions in the UK. A recent report found London, Oxford and Cambridge get 46% of public and charitable R&D in the UK. This is not simply a reflection of the disproportionately large amount of people and R&D activity in the southeast. Despite getting the lions’ share of R&D funding, these areas have just 21% of the UK population and 31% of R&D activity.

Neither are they the most efficient at delivering value for the money they receive. When UK Universities were ranked on their effectiveness at commercialising research, most of the top 10 universities were found to be outside the southeast, indicating research and entrepreneurial talent are evenly distributed around the UK but this is not being matched by funding patterns.

This is partly because innovation funding formulas tend to inadvertently reinforce the status quo by awarding funding to universities with the biggest existing productivity and research capacity. This creates a ratchet effect that shores up existing regional imbalances rather than redressing them. It also means universities are being rewarded based on how much research they conduct rather than their effectiveness at commercialising that research.

The recent Octopus Ventures ‘Spinning out Success’ report showed that universities in less affluent areas such as Belfast, Leeds, Dundee and Nottingham are among the best at creating and commercialising spinouts. Queen’s University Belfast receives a fraction of the funding of Oxford, Cambridge and Imperial, yet it was found to be the best in the UK at commercialising companies. A meagre diet of innovation funding has made many institutions outside the southeast adopt a ‘leaner’ approach to commercialisation.

Public R&D investment can be a stealth lever for ‘levelling up’ economic performance.

Redistributing innovation funding could be as important as post-Brexit state aid to the regions in spreading the nutrients of growth more evenly around the UK. We can achieve this without active redistribution of innovation funding by simply making funding formulas fairer.

Instead of innovation funding following and feeding existing regional imbalances, we should be rewarding research efficiency, not capacity. This would naturally see more money go to universities in areas such as Northern Ireland that have been found to outperform the southeast in their effectiveness at converting research to commerce. It would also incentivise more efficiency across the whole sector, boosting overall UK research performance and giving taxpayers better value for research funding. Innovation funding should also reward universities that contribute most to the local economy. Since universities outside the southeast have been found to make a disproportionately large contribution their local economies, this would also naturally redistribute resources as well as incentivising all universities to do more for their communities. In this way, we can make funding more regionally balanced, incentivise better performance across the research sector and reward excellence and efficiency.

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