IOP publishes report to show key role of physics in the UK economy

19 October 2017

More than two million people are employed in physics-based businesses in the UK and the sector accounted for 10% of GDP in 2015, according to the IOP’s latest analysis of the contribution of physics to the UK economy.

IOP publishes report to show key role of physics in the UK economy
Shutterstock/Maurus Spescha

Published to coincide with the announcement yesterday of the IOP’s 2017 Business Innovation Award winners, the report details the gross value added (GVA) by physics-based businesses to the economy of the UK, and their contribution to GDP and to employment.

GVA is a measure of the economic output of a sector and in 2014 physics-based businesses directly contributed £177 bn in GVA to the UK – amounting to 16.1% of total GVA in the economy. When indirect factors, such as the demand created in the supply chain and effects on household income and spending are included, the contribution was £411 bn.

GVA contributions by physics-based businesses grew by an average 3% a year between 2011 and 2014, while value added per employee – at more than £88,000 – was twice the UK average. The sector accounted for 6.7% of total employment in the UK.

The report, which covers the whole of the UK, complements reports for Ireland, Northern Ireland, Scotland and Wales, which were published by the IOP earlier this year. A summary, The role of physics in supporting economic growth and national productivity, and the full report commissioned by the IOP from the consultancy Cebr, The role of physics in driving UK economic growth and prosperity, have been published on the IOP website.

IOP publishes report to show key role of physics in the UK economy
Shutterstock/Maurus Spescha

In the report, IOP president Professor Dame Julia Higgins said: “The UK government has committed to a modern industrial strategy, including a desire to increase productivity and drive growth across the country. Physics-based industries contribute to that productivity and growth and will be crucial to securing the UK’s economic future.

“All kinds of physics research have the potential to have a huge impact: not only those directly and immediately applied to business, but also the curiosity-driven research that inspires and underpins the applications and technologies of the future.

“The government has shown its commitment to increasing science spending to 2.4% of GDP, which should be invested in all areas – cutting-edge science, fundamental research and work related to the real world.

“The IOP is working to ensure that investment in physics continues so that businesses can continue to grow in a changing landscape. The analysis presented in this report will be pivotal to that drive.”