ONS Finds 2021 R&D Spending on UK Telecoms Has Grown

The UK Office for National Statistics (ONS) has revealed that the telecoms industry has gone from last year’s report, when spending on research and development grew by just 0.95% to total £956m, to this year when such spending has risen by 4.5% (£44m) to reach a 9-year high of £1.028bn.

The latest annual report actually reflects data from 2020, which will have been impacted by the COVID-19 pandemic, and we should add that R&D spending on telecoms does have a long history of yo-yo like movements. Nevertheless, in growth terms we’re still a long way from 2018, when it grew 25.4% in the year to total £947m.

However, the industry is unusual in that it hasn’t grown its total R&D spending at all over the past decade. In fact, the amount the industry spends on R&D has shrunk £101m or 8.9% since 2010 when it registered £1.13bn. It now makes up 3.8% of total UK R&D spending. By comparison, across all sectors, UK R&D spending grew 3.5% last year to a record £26.9bn (a rise of 67.9% since 2010).

Mark Tighe, CEO of R&D Tax Specialist Catax, said:

“The telecoms sector is an unusual outlier in R&D terms. It has not grown its innovation spending at all in the past decade, which is alarming even if it has outperformed in growth terms over the past year.

Things have been improving since 2018, however, and with 5G infrastructure, gigabit and satellite broadband demanding so much attention, the stronger growth of the past few years should continue to push R&D spending to new highs.

A significant portion of this spending will be earning those companies responsible millions of pounds in R&D tax credits which can be reinvested straight back into R&D.”

The Government has set a target to bring UK R&D spending up to 2.4% of GDP by 2027 and the latest figures show that it is currently running at 1.7% of GDP.