Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

http://www.businessweek.com/stories/2005-11-28/united-kingdom-r-and-d-goes-into-the-tank

Businessweek Archives

United Kingdom R&D goes into the tank


? Do Economists Know about the Internet? |

Main

| Is the Job Market Really 'Buoyant'? ?

November 29, 2005

United Kingdom R&D goes into the tank

Michael Mandel

Nondefence R&D spending at United Kingdom businesses dropped by 6% in 2004, adjusted for inflation, according to a new report. (Thanks to Stumbling and Mumbling and Brad DeLong).

That's a big decline. As Chris Dillow of Stumbling and Mumbling points out:

The link here is both causal and diagnostic. Lower R&D spending could cause slower technical progress, which is the main contributor to long-run GDP growth. And it could be diagnostic of slower growth, as it signifies that firms are pessimistic about the future.

Second, there are interesting questions here. Why is R&D spending falling when interest rates are low and corporate cash balances healthy? Have firms cut the productive or unproductive parts of R&D spending? Can they tell?

Looking at the numbers a bit closer, it turns out that most of the drop has come from a cutback in U.K. government funding, combined with a cutback in funding from overseas sources. The companies themselves have done a pretty good job keeping up their own spending.

By the way, the 2004 figures for U.S. R&D spending aren't out yet.

11:00 AM

Growth

TrackBack URL for this entry:

http://blogs.businessweek.com/mt/mt-tb.cgi/


LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus