Physics fuels private sector innovation. Across every part of the UK, physics-based businesses are actively investing in R&D, driven by the desire to develop new products and services, grow their company, and meet evolving customer needs.
Physics-based businesses are renewing efforts to boost growth through innovation, with two thirds expecting to increase their R&D spending over the next five years, and can therefore propel progress towards the 2.4% R&D investment target.
Given the right conditions and support, physics-based businesses can deliver a step change in R&D activity, and boost growth, employment and competitiveness across the UK.
Barriers to unlocking potential
- Limited incentives for translational research
- Difficulty accessing finance
- Poorly targeted tax incentives
- Difficulty accessing knowledge, skills and facilities
Initial steps toward addressing these challenges
We recommend the UK Government takes immediate action to:
- Deliver planned uplifts in public R&D funding required to meet the 2.4% target at the earliest opportunity, to build business confidence and maximise the amount of private investment leveraged by 2027 and beyond
- Provide additional long-term funding for business innovation which spans the breadth of technology readiness levels, from early-stage R&D to development-stage activities
- Provide funding to create (and maintain) networks that enable knowledge exchange and facilitate collaboration between industry and academia in emerging technology areas.
Action is also needed from actors across the wider R&D landscape to:
- Support businesses to navigate the complex innovation landscape, in particular financing routes, intellectual property protection, and access to external expertise and facilities, building on existing support provided by Innovate UK EDGE and the IOP’s Business Innovation and Growth group
- Upskill small and/or new businesses in developing successful business cases when seeking private investment, as well as fostering greater confidence among private investors in physics-based and other highly innovative businesses by showcasing successes and demonstrating the typical timescales to generate return on investment
- Promote best practice across technology transfer offices to boost skills at a broader range of HEIs.
Next phase of the R&D blueprint
The IOP will carry out more detailed work to explore:
- Policy levers to enable radical increases in private sector R&D expenditure, in consultation with the current biggest investors in physics R&D.
Physics-based businesses generated £230bn in gross value added – 11% of UK GDP – in 2019, with those that rely most strongly on physics research responsible for a third (£8.9bn) of total private R&D expenditure.
From Physics and the Economy: Measuring the value of physics-based industries in the UK
Case study: Nanoparticle-based inks lead to lucrative applications in defence and sustainability
Since 2016, the Materials Physics Group at the University of Sussex has been developing highly conductive nanoparticle-based inks, using graphene and other 2D materials. The viscosity of these inks can be customised, enabling a range of practical applications.
In 2017, Advanced Material Development (AMD) was formed to commercially exploit the work of the Group while funding further research. Direct funding from AMD has allowed the Materials Physics Group to demonstrate potential scalability of the inks, as well as develop innovative radio-frequency identification (RFID) tags that are recyclable and environmentally friendly compared to their single-use predecessors. Further work includes the development of an advanced eye protection system with the US Government, protecting personnel such as police officers and pilots from direct laser radiation exposure. This work allows AMD to be a part of the rapidly-growing directed energy weapons protection market, which is expected to be valued at $75 billion by 2028.
AMD, as a result of this valuable physics-based research, has generated a significant patent portfolio, while attracting seven figure funding programs and partnerships with industry leaders and international organisations. The company directly employs 9 people, and funds 7 post-docs and 3 PhDs at the University of Sussex.