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The Future of R&D: Predictions for the Next Decade

In this blog, we'll explore the future outlook of R&D in the UK and predict upcoming trends and innovations. Join us as we dive into the world of R&D and discover the exciting opportunities that lie ahead.

Barrie Dowsett

Chief Executive Officer


10 minute read


Research and development (R&D) is the driving force behind innovation and economic growth, enabling businesses to stay ahead of the competition by developing new products, services, and technologies. The UK has a long history of being a leader in technological breakthroughs, from the industrial revolution to the digital age. In recent years, the government has placed renewed emphasis on R&D to fuel economic growth and secure the nation's competitive edge.

The UK government has set an ambitious target to increase public and private R&D investment to 2.4% of GDP by 2027, recognising the critical role that R&D plays in long-term prosperity. The tech industry, pharmaceuticals, and green energy initiatives are the predominant sectors in the R&D landscape. In 2020, the UK tech sector alone raised a record £11.2bn, signalling significant advancements in the field.

New digital technologies have revolutionised R&D, with artificial intelligence (AI), machine learning, virtual reality (VR), and augmented reality (AR) transforming the way research is conducted. These technologies have democratised access to massive computational power and enabled businesses to make sense of vast amounts of information to drive evidence-based innovations.

Furthermore, with the mounting threats of climate change, sustainable solutions are becoming increasingly crucial. As a signatory to the Paris Agreement, the UK aims to reach net-zero carbon emissions by 2050. This commitment has spurred significant R&D investments in renewable energy technologies, sustainable materials, and eco-friendly alternatives.

With the complexity of modern-day challenges, there's a rising trend in collaborative R&D, where businesses, academic institutions, and even competitors are joining forces. This trend helps to pool resources, knowledge, and expertise to accelerate innovation.

However, there are still challenges to be faced, such as the impact of Brexit on cross-border collaborations and the need for new trade and collaboration frameworks. Nevertheless, the government offers tax credits and grants to incentivise businesses to invest in R&D, making the UK an attractive destination for innovation.

In this blog, we'll explore the future outlook of R&D in the UK and predict upcoming trends and innovations. Join us as we dive into the world of R&D and discover the exciting opportunities that lie ahead.

Background: The Current State of R&D in the UK

The UK is taking significant steps towards securing a dominant position in science and technology, with renewed government focus on research and development (R&D). In 2020, the UK government pledged to increase public and private R&D investment to 2.4% of GDP by 2027, with the goal of stimulating long-term economic growth. The UK has a strong history of pioneering new innovations, and tech, pharmaceuticals, and green energy are among the sectors driving R&D spending in the country.

The World Economic Forum's Global Competitiveness Report of 2019 ranked the UK 8th worldwide for R&D performance, with its overall score largely driven by its excellent institutional environment and extensive R&D networks. In comparison, Japan and South Korea ranked first, investing 3.2% and 4.2% of their GDP in R&D, respectively.

The UK's R&D landscape is largely funded by businesses, with almost two-thirds of R&D funding coming from the private sector. However, the government also offers several incentives to encourage R&D spending, tax reliefs and grants being some notable examples. The R&D tax relief scheme, for instance, allows businesses to claim back up to 33% of their R&D expenditure. These financial incentives are attracting a growing number of international corporations to invest in the UK.

Overall, the UK is working hard to create an innovation-friendly environment and remains a world leader in many fields such as AI, biotechnology, and aerospace. With continued investment in R&D and strong government support, the UK has the potential to become a global leader in science and technology.

The Digital Transformation of R&D

As the world rapidly transitions into a digital age, research and development processes have also been transforming. One major aspect of this transformation is the increasing reliance on Artificial Intelligence (AI) and machine learning to enhance scientific research. By automating and expediting data mining, predictive analysis, and research methodologies, AI is making R&D more efficient and cost-effective. The healthcare industry is a prime example of this, with AI being used in areas such as drug discovery and genomics.

Virtual Reality (VR) and Augmented Reality (AR) are also playing an increasingly critical role in R&D. These technologies enable product designers to simulate and test products in real-time, allowing them to identify and solve potential problems before production. This can save businesses significant time and money by reducing the need for trial-and-error testing. VR and AR can also provide immersive experiences for consumers, allowing them to visualise, interact with, and customise products.

The advancements in cloud computing and big data analytics are also revolutionising R&D processes. With increased data storage capacities and computational power, researchers can now analyse and make sense of vast amounts of data with ease, identifying new insights and improving evidence-based decision-making. Even businesses with limited resources can now access these powerful systems through cloud-based services. As the potential of these technologies grows, so too does their impact on the R&D landscape, making them critical components in the quest for innovation.

Green and Sustainable R&D

The UK's commitment to reducing carbon emissions and reaching net-zero by 2050 has spurred significant investments in green and sustainable R&D. Businesses are now increasingly motivated by market demand for eco-friendly products and emissions reduction to create innovative solutions.

R&D focusing on renewable energy technologies has seen significant growth, with solar and wind energy development receiving the largest share of these investments. Sustainable materials are also a key area for R&D, with biodegradable plastics, compostable packaging and eco-friendly alternatives to traditional construction materials being developed. Innovations such as carbon capture and storage are being researched to limit carbon emissions from industries with exceptionally high emissions, such as energy generation.

The UK's clean growth strategy outlines a commitment to reduce greenhouse gas emissions by 80% by 2050 and boost the economy by cutting emissions to grow business, increase efficiency and boost employment. The UK Green Building Council is encouraging businesses to focus on sustainable products and services, with the aim of making all new buildings net-zero carbon by 2030.

These initiatives offer UK business owners significant opportunities to invest in and develop sustainable solutions, with tax credits and grants available to incentivise further R&D investments. The surge in green and sustainable R&D offers a positive example of how scientific innovation can be harnessed to meet global challenges, drive economic growth and reduce our negative impact on the environment.

The Role of Collaborative R&D

Collaboration is key in today's complex R&D landscape. Recognising this, businesses, government institutions, and universities are pooling their resources, knowledge, and expertise to accelerate innovation. Collaborative R&D has emerged as a necessity in tackling significant global challenges and meeting national priorities.

The UK is leading the way in this trend, with regions like Cambridge and Oxford becoming R&D hubs, attracting talent and investments. These clusters facilitate collaborations between businesses in different sectors, academic institutions, and research centers, producing a multiplier effect on innovation.

The benefits of collaborative R&D are not just confined to domestic partnerships. Global partnerships can enhance R&D capabilities, enabling businesses to tap into new markets, technologies, and knowledge. However, the post-Brexit environment has raised questions about existing partnerships and the negotiation of new trade and research agreements.

Despite these challenges, the government recognises the importance of fostering collaborations in R&D and has launched several programs to incentivise businesses. The Industrial Strategy Challenge Fund, for instance, has committed £2.6bn to fund major collaborative initiatives in cutting-edge fields like robotics and clean energy.

As a result of these initiatives, businesses have been able to offset research costs through tax relief schemes, making the UK an attractive location for innovation and driving economic growth.

Collaborative R&D is vital for driving innovation and meeting the pressing needs of modern society. The UK's focus on nurturing collaborative initiatives, both domestically and globally, has the potential to put it at the forefront of the R&D landscape in the years to come.

Healthcare and Biotech Innovations

The healthcare sector has been a key area of focus for R&D, particularly in light of the recent COVID-19 pandemic. Looking ahead, personalised medicine and genomics are expected to continue advancing rapidly, with potential breakthroughs in treatments tailored specifically to individual genetic make-ups. The UK has been at the forefront of genomic research, with the 100,000 Genomes Project aimed at unlocking new insights into conditions like cancer and rare diseases.

In the wake of the pandemic, the role of R&D in battling future outbreaks has gained even greater importance. Governments and businesses alike are investing in vaccine development, antiviral drugs, and innovative diagnostic tools to better monitor potential outbreaks and curb the spread of infectious diseases. The UK is home to some of the world's leading vaccine development programs and biotech firms, placing it in a strong position to respond to future pandemics.

Merging technology with healthcare has given rise to a new era of innovation, with wearables allowing real-time monitoring of a patient's vital signs and telemedicine enabling remote consultations. Robotics-assisted surgeries promise greater precision and faster recovery times for patients. These technologies are transforming the healthcare landscape, making it easier to diagnose and treat illnesses, and improving the overall patient experience. The UK is a global leader in healthcare innovation, with NHS-backed startups at the forefront of these developments.

R&D has been vital in driving healthcare and biotech innovations, and will continue to play a crucial role in driving progress. There is no doubt that personalised medicine, genomics, and advanced health technologies will become increasingly significant in the coming years, allowing us to tackle future pandemics and improve the quality of care for patients. The UK's commitment to R&D, coupled with its world-class research institutions and thriving startup scene, positions it as a leader in these critical fields.

Challenges Ahead

The UK's exit from the European Union has had significant implications for R&D collaborations with European partners. While the EU funded over €8 billion in science and innovation projects between 2007-2013, Brexit has cast uncertainty over future partnerships. The UK government has committed to funding and participating in Horizon Europe, the EU's €95.5 billion research and innovation program. However, the extent of collaboration and funding opportunities in future EU projects remains uncertain. To mitigate the risks, UK businesses and scientists need to explore new global partnerships, diversify funding sources, and invest in open research infrastructures.

Emerging technologies come with the challenge of bridging the skills gap in the workforce. According to a recent study by WISE Campaign, only 24% of people working in STEM (Science, Technology, Engineering, and Mathematics) fields in the UK are women, and only 13% are from ethnic minority backgrounds. Encouraging diversity and inclusivity in the STEM workforce is crucial in meeting the technological demands of the future. The government's Industrial Strategy aims to invest in training and education, focusing on emerging technologies like AI and robotics. However, businesses need to embrace life-long learning, reskilling, and upskilling to ensure a competent workforce.

Intellectual property (IP) rights are essential in protecting innovation, but it can impede open-source collaboration. Balancing IP rights with open-source frameworks is crucial for the future of R&D. The UK's Innovation Strategy, published in July 2021, proposed piloting a 'Patent Box Passport' scheme that incentivises companies to share IP across borders. Such initiatives would promote open innovation and foster cross-border collaborations. Resolving the IP and open-access debate will shape the future of R&D collaborations and maintain the UK's competitive edge in global markets.

Overall, while the UK's R&D landscape is vibrant and innovative, there are challenges and uncertainties that must be addressed to secure future prosperity. The UK business owners must adapt to the changing technological landscape and invest in developing their workforce, exploring global partnerships and embracing open innovation.

Maximising Government Incentives for R&D

As the UK government seeks to increase R&D investment to 2.4% of GDP, it has implemented tax credits and grants to incentivise businesses to undertake innovative projects. The R&D tax credit scheme, for instance, allows qualifying companies to reduce their tax bill or receive a cash payment worth up to 33% of their R&D expenditure.

The value of the credit depends on the scheme under which a claim is made. For example, under the SME scheme, firms can claim up to 33% of their qualifying R&D costs, while the RDEC scheme offers a cash credit of around 13% of eligible expenditure. Please note, these figures are due to change from 1st April 2023, read more via our latest blog: Spring Budget 2023: What the R&D Tax and Creative Tax Relief Changes Mean for Businesses

Click here to get a comprehensive overview of the R&D tax credits scheme, with step-by-step guidance on how to apply and maximise your benefits as a UK business owner.

Several successful businesses have benefited from these incentives. a list of examples of successful R&D Grant & R&D Tax Credit claims can be found here.

On the other hand, grants from the likes of Innovate UK and Horizon Europe provide funding for specific R&D projects.

To fully maximise these government incentives, businesses should ensure they meet the criteria set out by the relevant organisations. For instance, Innovate UK requires businesses to demonstrate that their project is innovative, addresses a significant market need, and has a clear route to market. Similarly, the R&D tax relief scheme allows for more innovative projects, but businesses must be able to show that they are genuinely seeking to advance scientific or technological knowledge.

While government incentives can provide a significant boost to R&D efforts, businesses must be strategic in their approach. By carefully selecting and framing projects to meet the necessary criteria, they can ensure they maximise their chances of securing funding or tax credits, enabling them to drive innovation and remain competitive.


In conclusion, the future of R&D in the UK is brimming with immense potential. As the UK government sets an ambitious target for increased public and private R&D investment, businesses must also embrace a proactive approach to stay ahead in the competition. 

AI and machine learning are revolutionising how R&D is conducted, specifically in drug discovery and data mining. Cloud computing and big data analytics provide democratised access to elaborate computational power, giving businesses an edge in driving evidence-based innovations. Moreover, the pressing need for sustainable innovation has become increasingly crucial with mounting threats of climate change.

To stay ahead of the curve, UK businesses can tailor their R&D policies more closely to national priorities, and the government can continue to offer tax credits and grants to incentivise investment in innovation, making the UK an attractive destination for R&D.

Why choose Myriad Associates to help with your R&D tax claim?

Myriad Associates has been managing R&D Tax Credit claims for nearly two decades, assisting a broad range of companies up and down the country. No matter what size or sector your company is in, we can help.

We understand how important R&D Tax Credits are, both to individual companies and the wider economy as a whole. However, because the government is keen to maintain the scheme’s success, they often update the rules and regulations around these R&D tax schemes, which can get confusing. This is where we come in.

The expert team of R&D tax advisors here at Myriad Associates apply a unique methodology when navigating through the complexities of the R&D tax claims process. To secure the R&D tax relief you're eligible for, we maintain a holistic approach.

First, we’ll work to understand the technical and scientific uncertainties your project faced in order to ensure we meet HMRC's strict R&D tax credits criteria.  Then, we’ll use that information to build a robust technical report, collate all the relevant costs and calculate the benefit owed for inclusion in your company’s tax return.

We’ll also happily handle any enquiries from HMRC should they arise. The claims criteria can be difficult to understand and so enquiries are becoming a more regular occurrence as HMRC works hard to tackle abuse of the scheme.

Whatever stage you’re at in your claim for R&D Tax Credits, simply contact us on 0207 118 6045 or use our contact page.

Whether you need full support from start to finish or simply have a quick question, we’re here to help.

Do you need help with an HMRC enquiry?

Has your R&D tax relief claim attracted the attention of HMRC? Don’t panic.

Enquiries into R&D tax relief claims by HMRC are on the rise. Our highly-qualified team will provide the utmost support to secure a beneficial resolution for your HMRC R&D enquiry, so that you can rest assured knowing your business is in safe hands.

We are well equipped to offer actionable advice on any R&D tax relief enquiries made by HMRC as well as provide proactive reviews that can help ensure complete peace of mind during these uncertain times.

If you’ve been contacted by HMRC about your R&D Tax Credit claim, or you’d simply like to know more, please do get in touch using our contact form or call our friendly team on 0207 118 6045.

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