Understanding social sciences, humanities and arts for people and the economy R&D in the UK and internationally

A narrow definition of R&D, which does not fully recognise the contribution of the arts, humanities and social sciences, risks undervaluing these contributions to the UK economy.

What is the issue?

The project was commissioned in response to concerns that current definitions of business R&D used in UK government datasets do not fully capture the extent and role of social sciences, humanities and arts for people and the economy (SHAPE) R&D in the UK economy.

The recent UK Innovation Strategy highlights R&D as a key part of the government’s agenda as it aims to increase annual public investment in R&D to £22 billion by 2035, but a narrow definition of R&D, which does not fully recognise the contribution of the arts, humanities and social sciences, risks undervaluing the contribution of SHAPE R&D to the UK economy.

This is particularly concerning considering the UK economy is largely service-based and risks missing out on SHAPE contributions to the government’s target of 2.4% of GDP being invested in R&D by 2027.

How did we help?

The report aimed to further investigate these issues and develop a fuller picture of the way SHAPE R&D is understood and captured in the UK economy and in a wider international context.

A mixed methods approach was used to gather evidence through literature reviews, interviews and data analysis across six UK sectors and five international comparators. Several cross-cutting themes were identified based on our analysis of SHAPE R&D in the UK. R&D spend in the UK is growing, and business R&D makes up a significant proportion of expenditure.

What did we find?

• Business R&D is concentrated in a small number of key sectors, and most of these employ a large number of graduates from non-scientific backgrounds
• Business R&D activity can be defined in many different ways, but stakeholders often implicitly associate R&D with STEM
• R&D employment data suggests SHAPE R&D comprises a small proportion of all business R&D
• Collaboration is key to SHAPE R&D
• Several sectors in which SHAPE plays an important role have a low level of engagement with R&D tax credits.

Main international findings:

• International comparators have broader R&D definitions which are more likely to recognise SHAPE R&D activities
• The inclusion of SHAPE in R&D definitions is often implicit rather than explicit
• Data on R&D is typically captured using surveys
• Tax credits are commonly used and provide another useful dataset on R&D expenditure
• Very few countries produce breakdowns of SHAPE and non-SHAPE R&D which makes international comparisons difficult.

What can be done?

Capture information on SHAPE R&D in routine data collection: Understanding the extent and importance of SHAPE R&D to UK business is critical in enabling effective strategic planning in terms of skills needs across a range of policy areas from education to immigration.

Make definitions of R&D clear and consistent and engage with key industry stakeholders to ensure clarity and understanding: Lack of clarity can have implications both for the consistency and quality of data to support evidence-based decision making, and the extent to which R&D incentives are effective in achieving their policy objectives.

Consider person-centred measures of R&D as well as measures of expenditure: Given the range and nature of contributions that SHAPE graduates can make to R&D activity across sectors, and the collaborative and interdisciplinary nature of much business R&D, a person-centred approach analysing the role and movement of people and their skills and capabilities may provide a useful alternative lens to analyse this topic.