The UK has fallen behind cohort nations in R&D investment, hampering efforts to boost productivity – with the impact being most acutely felt in the nation’s regions
A new report from the Royal Society of Chemistry highlights how important the chemical sciences sector is for the present and future prosperity of the UK and its regions, and calls on government to deliver against its investment commitments in research and development to boost productivity and fully deliver on its levelling up agenda for the UK’s green economic recovery.
As the UK approaches the end of the transition period of its EU withdrawal process — amidst a COVID-19-driven recession and the government pushing its levelling up agenda for the nation’s future prosperity — the report, conducted by Cambridge Econometrics, demonstrates the substantial economic contribution of chemistry using professionals at an average of £83 billion per year and their through skills and innovation to the UK.
Investment in research and development, which is vital in developing crucial talent and the innovations the UK needs to secure long-term economic recovery, still lags behind cohort nations at 1.7% GDP compared with Germany’s 3.1%.
Given the agility and resilience chemical science businesses have demonstrated during the COVID-19 pandemic, the Royal Society of Chemistry is calling on the government to ensure critical financial support to research intensive SMEs to retain talent and innovation within the UK economy and support future economic growth should the sector experience a further lockdown.
In light of this report, the Royal Society of Chemistry is calling on government to ensure it delivers on its commitment to invest 2.4% of GDP in R&D, to retain crucial chemical sciences talent and deliver the innovations the UK needs to address the pandemic and grow back green.
Professor Tom Welton, President of the Royal Society of Chemistry, said: “The chemical sciences make a significant contribution to the UK, playing a vital role across essential sectors in beating COVID-19 and delivering a green recovery for the UK. The government has a real opportunity to drive that recovery by ensuring it prioritises long-term investment in R&D to boost and sustain productivity. The chemical sciences in the UK are world-leading and are absolutely critical in responding to the many challenges COVID-19 has thrown at us."
“The agile, research-intensive SMEs that form such a significant part of our sector have clearly demonstrated they can operate in a COVID-safe environment – their ability to innovate and adapt is one of their most valuable strengths – but it’s equally important to highlight that there is a limit to how resilient they can be in the context of ongoing economic threats.”
Cambridge Econometrics’ research of a range of reputable data sources shows that:
Professor Welton continues: “We are calling on Government to carefully consider sector-specific conditions when deciding on business or sector closures in the face of second wave of the pandemic. Another lockdown means specific financial support will be absolutely critical to research-intensive SMEs, to retain talent and ideas within the UK economy and support future economic growth."
“We must ensure that strategies for economic recovery include processes to improve place-based understanding of sector capacity and strategies which support levelling-up across nations and regions in the UK. In short, the chemical sciences are what you need for the recovery you want.”
The report also contributes to evidence of a growing disparity between the nation’s regions.
Although the South East saw the number of chemistry using professionals grow to 51,093 in 2019 (up from 36,988 in 2013), the North West witnessed a drop of 11,339 (to 30,105) in the same period. This downward trend was reflected in the West Midlands (down 7,968 to 14,305), the North East (down 3,882 to 12,251) and Wales (down 3,996 to 4,981).
Speciality chemicals manufacturer Croda employ a number chemists in roles inside and outside of the laboratory, with a high level of technical knowledge and expertise needed in product development, production, sales and marketing to meet customer need and help them understand the chemistry and formulation requirements of the ingredients they make.
Croda CEO, Steve Foots, explains that their purpose is to use Smart Science to Improve Lives. He says: “Chemistry and chemists are at the heart of the Croda growth story and our continued ability to hire the best people will ultimately determine our future success."
“Our ambition and transformational goals have come from within and, I believe, represent a singular, company-wide level of commitment in delivering positive impact. We combine our highly skilled workforce’s knowledge, passion and entrepreneurial spirit to create, make and sell speciality ingredients that are relied upon by industries and consumers everywhere.”
The RSC’s five-point action plan aims to strengthen the chemistry workforce to enable economic recovery from COVID-19.
Dr Paul Colbon, CEO of Liverpool Chirochem, said: "At the start of lockdown, we faced a total shutdown of our business operations because our state-of-the-art university-based labs were closed literally overnight. Obviously that was a massive threat to our business and the livelihoods of all our staff in the UK and China, so it was devastating to me personally and professionally."
"As an expanding business, we were in the process of employing three new lab-based chemists, so I felt a huge personal responsibility for their welfare. As we had no way of telling when the labs might re-open, it was a really stressful experience for all involved."
"If there's one thing that we need to see for companies such as ours in the future, it's clearer communication from the government and heads of universities so that the infrastructure and facilities we rely on so heavily remain accessible — or at very least we know when it will be accessible again."
The report identifies the strong link between skills and innovation, which boosts productivity and economic growth. This link means the chemistry-using workforce plays a vital role in boosting the UK economy and shaping society and our environment. The UK needs a strong chemistry sector that will continue to play this role in the coming years, to help deliver on key health and environmental challenges and to create new jobs.
Skills improvements have accounted for one fifth of UK labour productivity growth in recent decades.
However, skills shortages have a real impact on firms’ day-to-day ability to do business, with higher skills shown to be related to greater levels of innovation. Chemistry-using professionals tend to be highly qualified and are therefore likely to make a significant contribution to innovation and, in turn, productivity and economic growth.