British R&D expenditure potentially 20% higher than estimated: ONS

British R&D expenditure: Early findings from the revamped Office for National Statistics (ONS) survey suggest that the annual research and development (R&D) expenditure in Britain might exceed current estimates by over 20 per cent. According to the redeveloped Business Enterprise Research and Development Survey (BERD), conducted by the ONS, the R&D expenditure in 2022 amounted to £53.0 billion ($66.4 billion), contrasting sharply with the existing estimate of £43.4 billion—a notable 22 per cent increase.

R&D spending plays a crucial role in gross fixed capital formation, encompassing investments in both the business and government sectors, along with construction projects. Historically, R&D has been a concerning aspect of Britain's economic landscape.

Recent data from the Organisation for Economic Co-operation and Development (OECD) indicates that in 2022, Britain ranked last among the Group of Seven (G7) advanced economies concerning gross fixed capital formation, accounting for 18% of economic output.

However, the latest release from the ONS suggests a potentially rosier scenario, contingent upon similar adjustments not being made by Britain's peer nations in their measurement methodologies.

The ONS noted that the enhanced BERD survey, now gathering responses from 38,500 businesses compared to the previous 5,400, could substantially elevate the recorded levels within business investments and the overall economy.

Preliminary analysis indicates that the increased R&D expenditure might bolster business investment by 3.9 per cent, with a comparatively smaller impact on the overall economic output, according to the ONS.

A comprehensive assessment of the new R&D estimates' full ramifications is slated for the annual economic evaluation of the British economy in 2025, as announced by the ONS.

(with Reuters inputs)