Investment in science and innovation should not be seen as a zero-sum game in which public and private investment can substitute for each other, a new report argues.

By international standards, the balance of R&D spending in the UK is skewed disproportionally towards the public sector, prompting calls from some observers for the state to pull back and for industry to invest more.

But the argues that there is a strong correlation between public research funding and private sector involvement in research. It says universities with higher levels of public funding generate more research income from non-public sources, while research council-funded scientists are more likely to be involved in the commercial application of their research.

The report, commissioned by the Campaign for Science and Engineering and written by academics from the University of Cambridge and Imperial College London, is the first of what is likely to be a string of documents setting out the economic case for investment in science ahead of the next four-year spending review, which will occur soon after next spring¡¯s general election.

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The report finds that higher public research investment correlates with higher industry productivity, particularly in industries that carry out a lot of R&D. It says this is not only because publicly funded research is more applicable to such sectors, but also because companies that carry out their own R&D have a higher ¡°absorbative capacity¡± to make use of publicly funded research.

It cites the proximity of pharmaceutical companies¡¯ research labs to highly rated university chemistry departments as evidence that multinational companies¡¯ decisions about where to carry out their R&D is affected by the quality of a nation¡¯s science base.

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Report author Alan Hughes, a senior research associate at Cambridge¡¯s Centre for Business Research, said the report provided ¡°compelling evidence¡± that public investment in research increases rather than diminishes private sector investment.

¡°They should not be seen as substitutes in the drive to enhance the productivity performance of the UK,¡± he said.

Sarah Main, director of CaSE, said: ¡°The UK has a world-class reputation for scientific research, which innovative industries want to access. Government will reap great rewards by investing in science through university and research funding because it raises our knowledge base and acts as a magnet for private sector investment.¡±

paul.jump@tsleducation.com