Decline in R&D investment

Northern Ireland has recorded the largest percentage decrease in in-house business research and development (R&D) of all 12 UK regions.

On the back of a record year of investment in research and development between 2014 and 2015, latest statistics for Northern Ireland highlight a decrease of £9.4 million from 2015 to 2016.

Overall expenditure on research and development in 2016 was £739.3 million – by business, higher education and government in Northern Ireland. The majority of the spend was by business (£523.8 million), with higher education and government spending £193.8 million and £21.7 million, respectively.

The decrease was dominated by a £15.3 million (2.8 per cent) fall in business expenditure, with increases recorded for higher education (£0.9 million, 0.5 per cent) and government (£5 million, 29.9 per cent).

The decrease appears to be founded in an overall lower output by Northern Ireland’s 10 largest spending companies. In 2016, they accounted for 38.8 per cent of total R&D spend compared to 46.6 per cent in 2015.

The number of local and externally owned companies engaged in R&D actually increased by 4.7 per cent over the year and expenditure by small and medium sized companies (SMEs) increased by 2.9 per cent.

Comparison

Eight UK regions recorded an in-house business R&D expenditure increase over the year to 2016. While Northern Ireland did not have the lowest overall expenditure, its decrease of 4 per cent was the largest over the year and contrasts badly with a UK average increase of 5.6 per cent.

However, when looking at the level of investment in relation to proportion of GVA, Northern Ireland’s 1.4 per cent rate is the sixth highest of the UK regions and is higher than the UK average rate of 1.3 per cent.

Real terms

While the majority of the Northern Ireland Research and Development Headline Statistics 2016 is presented in cash terms, a real terms analysis shows expenditure decreased by £26.2 million or 3.4 per cent over the year. Business expenditure decreased by 5 per cent, higher education decreased by 1.7 per cent and government spending increased by 26.9 per cent.

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