(Title Image: National Assembly)

Economy & Infrastructure Committee

Innovation & Research (pdf)

Published: 11th April 2019

“Despite the Welsh Government’s claims that it has a vision for research and innovation, it is clear that those in the post-compulsory education sector are not aware of it. There is a need for a vision that encompasses everyone, and recognition that investment will be needed to create more innovation from cutting edge research conducted in Wales.”

– Committee Chair, Russell George AM (Con, Montgomery)

See also: State of Wales – The Welsh Economy VII: The Knowledge Economy

1. Welsh research centres need to work harder to secure UK-wide R&D funding

The UK Government Industrial Strategy set a target of 2.7% of UK Gross Value Added (GVA) being spent annually on research and development by 2027. To support this, UK Research & Innovation (UKRI) was established with an annual budget of £4.5billion. UKRI is open to all UK research centres and universities. £3.8billion of this money is redistributed via UK Research Councils.

By comparison, the Welsh Government spends just £92million on R&D – though the actual figure is less than that due to decisions taken by the Higher Education Funding Council for Wales (HEFCW).

The Welsh Government said that due to the current financial and funding uncertainty, it would be difficult to set a Welsh target for R&D spending – though the Committee recommended they do so anyway.

Preliminary work is being undertaken to establish a Welsh research office in London to improve Welsh access to UK level funding, but the Committee was told that there needs to be more than just office space; any Welsh presence in London had to be led by “a visionary, charismatic, forward-facing” person to fight Wales’ corner.

2. There needs to be a clear vision for the future of R&D in Wales

The Welsh Government intends to introduce a Post-Compulsory Education, Training and Research Bill before the end of the Fifth Senedd in 2021.

The Committee and witnesses believe there needs to be a clear vision for where R&D will go in the future, as well as proper acknowledgement of the unique contribution universities make to the Welsh economy – particularly some of the strengths of the higher education sector including its interconnectivity and the relative strength of Wales’ research base.

There were additional concerns that the proposed new post-compulsory education body – Research & Innovation Wales (RIW) – won’t be independent of the Welsh Government. One item of particular concern was that RIW wouldn’t be allowed to engage with the UK Government without the expressed permission of the Welsh Government.

The Committee also believes that the dual funding system – whereby universities receive a quality-related (QR) funding grant and also have access to competitive research grants – needs to be maintained. They also recommended the principle that funding decisions should be made based on peer review and not by the government (Haldane Principle) should be enshrined in law.

3. Investment in R&D in Wales is lower than our population share and research quality warrants



Almost half of all research funding in the UK is spent at Cambridge, Oxford and London universities. As decisions at a UK level are based on research excellence, stronger universities get stronger.

Welsh universities “punch above their weight” in terms of high-quality research and research productivity (in 2014 a third of Welsh research was deemed “world-leading” and a half “internationally excellent”), but geography is part of the reason why they miss out.

Welsh universities received just 3.9% (£71million) of all QR funding in the UK in 2018-19 and HEFCW didn’t spend anything on Innovation & Engagement funding – compared to £19million in Scotland and £210million in England. As part of the Diamond Review into higher education funding, it was said every £1 spent on innovation and engagement generates an additional £7.90 in external funding for universities.

Small businesses told the Committee they often found it difficult to engage with universities, while SMEs also lack the capacity to put together the kind of bids needed to secure large amounts of research funding – this was the sort of thing Innovation & Engagement Funding is used for.

There was also very low engagement with venture capitalists, with just 0.5% of all UK venture capital activity taking place in Wales. This wasn’t said to be a problem with the support offered by universities, but more a problem down to the lack of access to external funding needed to scale up commercial ideas and spin-outs.