Logo Top Home  About the Institution of Operations Management  Contact Us  Shopping Basket  Member Login  Forum 
Institute of Operations Management
Membership Education and Training Events Learning Resources Journal and News Members Only
 
Search Options
Click here to Search the Website
Join the IOM Today
Find us on LinkedIn
Read about APICS
Operations Management News RSS feed Why not subscribe to our RSS feed of IOM News?

R and D Budget snub could cost UK dearly

18 May 2009
Add to: Digg Add to: Del.icio.us Add to: Facebook Add to: Furl Add to: Google Add to: Live Spaces Add to: MySpace Add to: StumbleUpon Add to: Twitter
Darling’s failure to boost innovation incentives could send R&D contracts – and UK jobs – overseas

Alastair Darling’s so-called ‘Budget for jobs’, saw the announcement of several packages aimed at kick-starting a healthier recovery, including a £2million boost to JobCentre Plus services and plans to generate 400,000 jobs within ‘green industries’ over the next five years. 

But David Marshall, Director of R&D tax specialist Alma Consulting Group, believes the Chancellor has missed the point:  “Growth, and the subsequent jobs that this creates, is essentially driven by the development of intellectual property and innovation, which in turn is driven by research and development. It’s an expensive investment, which is why so many businesses outsource their R&D overseas. One way we can encourage innovation in the UK– where it can generate jobs – is by making existing working incentives, like the R&D Tax Credit scheme, more financially appealing to businesses. 

“So why is it, after headway was made in the 2008 Budget, have R&D Tax Credits been snubbed this time around? Particularly at a time when an essential part of the road to economic recovery derives from innovative companies? 

“Darling promises a ‘green revolution’ and expansion for core sectors like pharmaceuticals, bioscience, advanced manufacturing, health care and IT, yet these are the sectors that are highly driven by R&D. It doesn’t make sense to try and boost one without boosting the other. 

“Whilst R&D tax benefits have improved over the last few years, the scheme still pales in significance to the tax reliefs available to businesses in France. The danger is this: if the less competitive R&D Tax Credit rates we have in the UK leads businesses to outsource their R&D overseas, the opportunity to create vital UK jobs could be lost, and that’s a problem the Chancellor won’t be able to ignore.” 

The UK is one of the OECD (Organisation for Economic Cooperation and Development) countries, all of whom offer some type of R&D investment incentive. The UK target from the scheme is to encourage UK innovation achieving 2.5% of GDP investment in R&D by 2014. In 2008, R&D tax credit enhancement increased from 150% to 175% for SMEs, and from 125% to 130% for large companies.
Bookmark this Article Link to this Article Subscribe to the IOM Newsletter Send this Article to a Friend/Colleague

Related News

19 January 2010
‘Operations Management’ is your membership journal and I’d really like to know what you think of it – are we publishing what y....
19 January 2010
IOM Scotland is truly up and running in 2010 with a scheduled events programme that kicks off with a Lean Six Sigma and Works Visit at FMC Corporation....
19 January 2010
The IOM held its first exam series for APICS in December. We have just received word that 82% of candidates passed first time – congratulations ....

Link To This Article

Copy and Paste the following HTML into your page.
 
The Institute of Operations Management, CILT(UK), Earlstrees Court, Earlstrees Road, Corby, Northants NN17 4AX.
Tel: 01536 740105. Fax: 01536 740101. Email: info@iomnet.org.uk
    © 2012, The Institute of Operations Management.     Help |  Site Map |  Legal Disclaimer |  Privacy Policy Designed By ZARR