Inadequate innovation
Research and development spending in Northern Ireland has declined in real terms for the third consecutive year, leaving the region among the lowest spenders in the UK.
The central innovation strategy for Northern Ireland is the Collaborative Innovation Plan, launched in October 2025 by the Department for the Economy in collaboration with Innovate UK and Invest NI.
The plan aims to boost business innovation, research and development (R&D) spending, and successful local bids for UK-wide funding, although it contains few commitments to concrete actions, funding, or programmes.
The most recent R&D figures from NISRA suggest that a more comprehensive strategy to boost innovation may be needed.
In 2024, £1,000.7 million was spent on R&D in Northern Ireland, an increase of £4.5 million from 2023, representing a rise of 0.5 per cent.
Most of this spending (71.3 per cent) was carried out by businesses (BERD), while 26.1 per cent came from higher education (HERD), and 2.5 per cent was spent by government departments.
The increase of £10.9 million in higher education spending counteracted the decreases in both business and government of £4.7 million and £1.7 million respectively.
When using constant prices, which removes the impact of inflation, total R&D spending in Northern Ireland in 2024 decreased by £31.4 million compared to 2023, a 3.1 per cent drop.
This is the third successive year that the total spend in constant prices has declined, decreasing by over £100 million pounds since 2022.
The services sector contributed to the majority of BERD in 2024, spending £368.3 million, which is 51.6 per cent of the total expenditure.
The largest sub-sector was ‘professional, scientific, technical, administrative, and support service activities’ which accounted for £185.6 million or 26 per cent of total BERD spend.
There was also significant BERD expenditure in the manufacturing sector where £319.3 million was spent, 44.7 per cent of total BERD spending.
Just under one-quarter (23.6 per cent) of this spending was accounted for by companies involved in the manufacture of transport equipment, who spent £75.2 million.
BERD expenditure was evenly split between smaller and larger businesses with firms with less than 250 employees accounting for 48.2 per cent of spending while those with more constituted 51.8 per cent.
A significant proportion of Northern Ireland’s BERD stems from the Belfast council area, which accounted for £292.3 million, 41 per cent of total spending.
Northern Ireland constituted 1.4 per cent of the UK’s BERD spending in 2024, meaning it was the region with the second lowest spend.
The other devolved regions of the UK BERD expenditure dwarfs Northern Ireland’s £758 million with Wales spending £884 million and Scotland spending £2.84 billion.
HERD expenditure is one area where innovation is increasing in Northern Ireland, rising by £10.9 million to £261.5 million in 2024, a 4.4 per cent rise. This means that the region’s HERD spending has increased every year since 2019.
The primary source for HERD funding comes from the block grant which provides £110.3 million, which is 42.2 per cent of the total HERD spending.
