Whilst there has been much focus within the Higher Education sector on the future of the UK’s relationship with the Horizon programme, the relationship with the European Regional Development Fund (ERDF) has been somewhat overlooked. The UK’s engagement with Horizon (primarily focussed on research) remains subject to ongoing negotiation and agreement. Our relationship to the ERDF (primarily focussed on skills, innovation and social inclusion) is clear: it is ending in 2023. Many UK universities are winding down or closing innovation and skills activities which ERDF previously funded. This presents a risk and an opportunity for innovation in the UK.
The UK must invest in research and innovation to address a persistent national productivity crisis. Before the recent ONS ‘technical adjustment’, long term data showed the UK’s gross domestic expenditure on R&D as a percentage of GDP at between 1.6%-1.7% – well below the 2019 OECD average of 2.5%.
UK R&D spending is comprised of business (55%), universities (23%) and government (7%). The role of government spending is commonly seen as a catalyst or addressing market failure and is critical to a successful, robust economy. ERDF formed a reasonable proportion of public (geographically targeted) investment in innovation. With ERDF no longer part of the equation, we have a different and evolving innovation funding landscape.
It is difficult to deliver an exact assessment of the extent to which ERDF is set to be replaced by other sources, since no like-for-like funding will exist. Questions exist around whether new funding will be subject to the same level of targeting, based on economic need and geography. This is partly because the economic development environment in the UK is in a high degree of transition. Investment is being channelled through a broader array of organisations and funds, such as Mayoral Combined Authorities, Shared Prosperity Funds, Innovate UK, Advance Research & Invention Agency and Research England.
