Investment in UK telecoms' R&D falters

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Analysis of R&D tax relief shows spending has varied more in telecoms than in other sectors over last 10 years.

R&D spending in the UK telecoms industry has remained almost static, rising just 0.95% last year, according to analysis of the latest ONS’ (formerly Office of National Statistics’) data by R&D tax relief specialists Catax shows.

Past glories

This followed a huge of 25.4% jump the previous year. Total telecoms sector spending on R&D reached £956 million (€1.072 billion) in 2019, barely up on the £947 million registered in 2018,, according to data released on Friday.

In the UK, 10,000 people directly involved in R&D in the telecoms sector.

Before the global financial crisis of 2008, the UK spent £1.4 billion annually.

Pandemic and 5G

Catax says uncertainty surrounds the impact Covid-19 will have on the level of investment in 2020, as the telecoms sector continues to pursue a range of technological advances, not least the rollout of 5G infrastructure and new handset technology.

Overall, UK businesses across all sectors are investing more in R&D continues, on average rising 3.3% to £25.9 billion between 2018-2019,  but Catax notes this was the slowest rate of growth since 2012.
The pharmaceutical sector posted the largest increase in R&D expenditure, with an increase of £306m (6.9%) to £4.8bn.

Most varied

Mark Tighe, CEO of Catax, said, “R&D spending in the telecoms sector has varied much more than in other sectors over the past decade.

“It has barely moved in the space of a year and still has some way to go before it recovers to levels seen around the time of the global recession.

“The worry now is that Covid-19 disruption will have set the sector back in its recovery but the telecoms sector will have benefited in many ways from the new normal people are experiencing and this gives some hope that a collapse in spending might be avoided.”