Digital Research Reports

Examining implications of Brexit for the UK research base

An analysis of the UK’s competitive research funding

Daniel Hook and Martin Szomszor

MAY 2016

1Digital Research Reports

Examining implications of Brexit for the UK research baseAn analysis of the UK’s competitive research funding

Introduction

Economic and political discourse in the UK is defined by five-year governmental cycles. The long-term effects of political decisions are not often substantively discussed in the media. But a longitudinal study of competitive grant funding over the last decade by Digital Science reveals that the UK research base has developed a significant dependence on funding from European Union (EU) sources. Of course, funding is not the only advantage that comes with being part of the EU research community, but it is the most tangible and measurable way to assess the benefits of EU membership in a research context. Were the UK to vote to leave, a damaging blow could be dealt to the UK’s greatest hope for long-term prosperity – our research base.

Removing the chance to participate in EU funding while, at the same time, failing to adequately plan to plug this funding gap could lead to as much as a £1bn annual funding deficit compared to current funding levels across the UK research base, according to our analysis. The financial argument put forward by many in favour of Brexit is that the UK will be better off from not investing in EU membership, but this political tactic is just a “quick win” and pulls focus away from long-term planning for economic prosperity. Critically, the direct savings created by membership of the EU (minus the UK’s negotiated rebate) risk being perceived as new funds for the UK government to allocate as it sees fit rather than targeted funds that should be spent on new shortfalls created by an exit scenario.

Research funding in the UK operates on a mixed funding model constituted of block funding for quality-related research (so called “QR” funding), which is awarded to participants in the Research Excellence Framework (REF) based on the quality of research that they produce; and competitive funding from the Research Councils UK (RCUK) and InnovateUK. QR funding accounts for around 37.4% of the money awarded to the sector but realistically the only part of the funding that research institutions can affect is the envelope of their competitive grant funding. QR funding is not awarded to non-universities. All research institutions in the UK can also benefit from charity and industrial funding. This article focuses on the funding that research institutions can affect – namely competitive grants.

The UK enjoys a number of significant benefits brought about by British universities and the commercial sector winning funding from the European Research Council (ERC) and the European Commission (EC). In the event that the UK votes to leave the EU, significant political efforts will need to be made to plug the funding gap and avoid long-term damage to the research and education sector.

There are obviously parallels between Scotland leaving the UK union and the current Brexit debate. When, in 2014, Scotland considered the question of independence from the UK, many commentators in the research and education sectors made the case for Scotland remaining as part of the UK’s research community regardless of whether they stayed in the union or left, since Scottish universities are so successful in attracting funding in proportion to the overall

Daniel Hook has been Managing Director of Digital Science since July 2015. He has been involved in research information management, open access, open data and software development for more than a decade, holding positions as Director of Research Metrics at Digital Science, Founder and CEO of Symplectic and COO of Figshare. By training he is a mathematical physicist specialising in quantum theory. Daniel holds visiting positions at Imperial College London and Washington University in St Louis and is a Fellow of the Institute of Physics.

Martin Szomszor is Consultant Data Scientist at Digital Science. Previously Head of Data Science and founder of the Global Research Identifier Database (GRID), Martin has worked on a range of research metrics projects, applying his extensive knowledge of machine learning, data integration, and visualisation techniques to uncover novel insights and inform the academic research lifecycle. He was previously Deputy Head of Centre at the City eHealth Research Centre (2009-2011) where he led research on the use of social media for epidemic intelligence and was Chair of the 4th International Conference on Electronic Healthcare for the 21st Century. Martin was also a Research Fellow at the University of Southampton (2006-2009) where he worked on various Linked Data, Semantic Web, and Social Network analyses projects. Martin has a BSc and PhD in Computer Science.

Digital Science is a technology company serving the needs of academic research. We offer a range of technology and content solutions that help make the research process more productive and efficient. Whether at the bench, in the field, or in silico, our products help to simplify workflows and evolve the way that research is done. We believe passionately that tomorrow’s research will be different to – and better than – today’s.Visit www.digital-science.com

ÜberResearch is a provider of software solutions focused on helping funding organisations, non-profits, and governmental institutions make more informed decisions about science funding, portfolio analysis and reporting. The company’s cloud-based platform provides better views of an organisation’s grant data, peer organisation activities, and the data of the funding community at large. ÜberResearch is a Digital Science portfolio company. Visit www.uberresearch.com/

Digital Science Research Group draws on the skills of team members across Digital Science and its portfolio companies to enhance reports and custom analyses. For this report participants included: Jonathan Adams, Nicko Goncharoff, Mark Hahnel, Lisa Hulme, Tamar Loach, Tom Letcher and Jon Treadway.

This report has been published by Digital Science, which is operated by global media company, the Holtzbrinck Publishing Group.

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Copyright © 2016 Digital Science

About the authors

About Digital Science

About ÜberResearch

Acknowledgements

ISBN: 978-0-9929477-6-7

32 Digital Research Reports Digital Research Reports

in BERD. Our success in gaining European funding is masking serious deficiencies not only in government commitment to R&D but also to the commitment of the wider business community to fund investment in our future prosperity. There are a number of important limitations to the analysis of the REF impact case studies which should be acknowledged. Most importantly the impact case studies were not reflective self critical documents – nor was there any requirement or mechanism for standardised reporting of units or impact outputs. For this reason, if the case studies are to be used for research purposes to understand better how, why and when impact occurs, they would have to be re-purposed for analysis, by linking to other data sources and adding missing information.

Collaboration and competition

What would Brexit mean for the UK research landscape? In the event of Brexit, it is uncertain that the EU would continue to allow the UK to apply for funding from the research community in the same way. Based on data from the Dimensions database, just 7.2% of the research funding awarded by the European Union and the European Research Council has been allocated to non-member states in the last decade – a total of £3.5bn (see Figure 1). Almost £2.5bn of this non-EU member recipient funding has been given to Switzerland and Norway. Norway has received almost £900m in the last ten years and this represents a 12% contribution to the available competitive government funding. This is just 10% of what the UK has won over the same time period.

Countries across the EU represent some of the UK’s largest and closest collaborative partners in terms of shared funding, flow of research students and staff, and the production of research papers. Although the practice and trend of collaborating internationally is unlikely to be stemmed by a Brexit, the UK’s ability to collaborate on a global scale will inevitably be significantly impacted by reduced funding from the EU.

Research has always been a global enterprise and there is clear evidence that it is becoming more so. In addition, being in the EU makes it easier to collaborate - research is not restricted by national boundaries. However, the Open Access and Open Data movements, which do so much to transcend national barriers, are already challenged by different legal requirements in different countries, and funders wishing to ensure that both data and publications are made openly available can be caught out by competing requirements across different nation states. EU funding criteria are written to take account of the legislative landscape across member states; they are often also designed to foster relationships between EU countries. Being less central to these relationships, as the UK may not be a party to so many grants, could sideline the UK. The effect may be subtle at first, but without sustained funding to support travel and collaboration the UK will become a more challenging partner with which to work.

Scottish economic contribution to the UK. An independent Scotland without access to RCUK funding would have needed to find money to cover the shortfall in funds in order to maintain parity; potentially leading to tax rises in Scotland. Brexit would create a similar scenario, but now for the UK as a whole. A key difference is that the UK would have the opportunity to invest money saved from the cost of EU membership directly to support UK research, rather than needing to make unpopular tax changes to preserve the status quo.

The UK’s position in international research

As outlined in Digital Science’s recent Digital Research Report on International Collaboration [1], the majority of research papers attributed to British authors have, for the last five years, included an author from at least one other country. At the same time, the total number of papers that the UK is involved in producing is increasing: the UK remains the fifth largest producer of scientific and technical journal articles [2] behind the USA, China, Japan and Germany, which means that it is just ahead of India, and significantly ahead of France and Italy. The UK achieves this position with a modest investment of just 1.63% from public and private sectors in research – placing the UK as 20th in the international league table [3] of R&D spend as a percentage of GDP.

Looking in more detail at figures from the Organisation for Economic Cooperation and Development (OECD) reveals an even more concerning picture: The UK performs disappointingly in BERD (investment from business in research) with UK companies contributing just 1.06% of GDP toward research and development – almost 80% lower than businesses in Germany; below both the averages for EU-15 and EU-28 nations; and behind much of the EU-15 (the exceptions being Italy, Greece, Spain, Portugal and Luxembourg). Indeed, the Czech Republic, once far behind the UK in most R&D statistics, overtook the UK in GERD (gross expenditure in R&D) as a percentage of GDP in 2012 and will overtake us this year

Figure 1: Breakdown of EC and ERC funding awarded between 2006 and 2015 by country. Top 13 countries named, Other EU contains the bottom 15 EU grant winning nations. Non EU comprises 58 countries outside the EU 28 nations who have received funding.

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Country Total EU Funding2006-2015 £M

Austria 1389Belgium 1931Bulgaria 28Croatia 52Cyprus 81Czech Republic 131Denmark 1001Estonia 69Finland 961France 5355Germany 8336Greece 1301Hungary 231Ireland 851Italy 4303Latvia 38Lithuania 35Luxembourg 75Malta 22Netherlands 4143Poland 342Portugal 494Romania 69Slovakia 45Slovenia 83Spain 4240Sweden 1740United Kingdom 8045

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Figure 2: Competitive research funding in GBP won from the ERC and the EC between 2006 and 2015 by country - figures detailed in Table. Source: Dimensions from ÜberResearch.

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Percentage Funding from EU0 10 20 30 40 50 60 70

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Percentage Funding from EU to Universities0 10 20 30 40 50 60

Figure 4: Percentage of competitive grant funding coming from the EU by region. The darker, the higher the EU percentage. White dots show UK universities recognised in GRID. Source: Dimensions from ÜberResearch, GRID from Digital Science.

Figure 5: Percentage of competitive grant funding awarded to universities from the EU. The darker, the higher the EU percentage. White dots show UK universities recognised in GRID. Source: Dimensions from ÜberResearch, GRID from Digital Science.

Not just a London problem

While London and the South East have a disproportionate number of our research institutions, funding cuts aren’t felt exclusively in that region. Our research identifies regions across the UK which are affected in different and diverse ways, with significant variances in levels of dependency on EU funding. While all parts of the UK are reliant on EU funding to some extent, the areas with the highest dependency overall are South West England, outer London and parts of North England and Scotland (Figure 4). If we consider how universities would fare by region (Figure 5) we see that South West England is, again, more dependent on EU funding than the UK is on average, as are some of our top universities.

The third sector

EU research funding also supports the UK’s not-for-profit sector, and it is perhaps here that we see some of the greatest cause for concern. Figure 7 illustrates that large portions of the UK are heavily dependent on EU funding to support not-for-profit initiatives.

Subject areas

This research finds that, while all research areas would suffer to some extent by withdrawal from the EU, specific subject areas could be disproportionately hit. For the funding sources in the Dimensions database, it is revealing to compare competitive funding from the UK (RCUK and InnovateUK) and from the EU sources (ERC and EC) where it is associated with specific fields. For instance, Forestry Sciences receives close to 53% of its competitive funding – as opposed to direct government support - from the EU. Withdrawal of this EU funding stream would have a significant adverse effect on departments at the Universities of Aberdeen, Stirling, Cambridge and Liverpool as well as the Orkney Fisheries Association. There is a similar story for Evolutionary Biology, where 67% of competitive research funding (£19m in the UK over the last 10 years) is provided by the EU, with the biggest recipients being UCL and the Universities of Sheffield, Exeter, Aberdeen and Cambridge.

Nanotechnology, a highly innovative area of science and technology, also stands out in its reliance on European grants, with 62% (£13.5 million) of its competitive research funding coming from the EU. The biggest recipients are the University of Glasgow, CTech Innovation and the University of Cambridge. Biomedical research is another critical area, in which the UK truly leads the world. Over 40% of competitive research funding classified in the Dimensions database as being principally concerned with Oncology and Carcinogenesis is currently provided by the EU. The social sciences may also see major impacts if EU funding disappears: 94% of competitive funding for Economic Theory comes from EU sources.

British business

British industry also benefits from the UK’s relationship with the EU (Figure 6). Funding to support research within businesses, which creates jobs in research beyond our universities today, and the possibility of jobs in the wider workplace tomorrow, has numbered in the tens of millions of pounds over the last decade. Of course, companies spend a significant amount of their own money on R&D programs but around 8% of the funding won in the UK from the EU over the last

While the UK is a net contributor to Brussels [4], the money that UK universities win from EU funders represents a significantly higher proportion than for universities in other EU countries. As a proportion of the UK’s membership fee, the UK has won back 7.4% in competitive research funding since 2009 (see Table 1). The UK is the second most successful winner of EU research funding in cash terms, marginally behind Germany, over the last decade. The UK, due to its spending significantly less as a proportion of GDP on research than other developed nations, is significantly more dependent on EU funding than countries such as Germany. The EC and the ERC competitive grant funding has been equal to around 1/3 of the competitive funding given out by the UK’s own research councils (RCUK) and InnovateUK (see Figure 3).

Hence, the success (or efficiency) of the UK’s research sector has been a double-edged sword: While we have remained highly internationally competitive and successful and have won a large portion of EU funding, we have not invested at a national level to ensure that we keep up with competitors on our own without EU assistance. Rather than allowing the UK to gain an even better position on the global stage by having an excess of funds to deploy, EU funds have been used to prop up and cover systemic issues with how we chose to fund research in the UK both at a governmental and corporate level.

Year UK Contribution after rebate

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2009 8,737 810 9.3

2010 12,150 745 6.1

2011 12,214 957 7.8

2012 12,636 1,045 8.3

2013 14,461 1,273 8.8

2014 14,361 635 4.4

2015 12,918 967 7.5

Table 1: EC and ERC funding as a percentage of net UK membership fee after rebate between 2009 and 2015.

Source: Dimensions from ÜberResearch & HM Treasury European Union Finances [4].

Figure 3: Proportion of funding from RCUK and InnovateUK to the UK research base versus the amount supplied by competitive grants awarded by the ERC and EC. Source: Dimensions from ÜberResearch. 0

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Percentage Funding from EU to Companies0 10 20 30 40 50 60 70 80 90 100

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Percentage Funding from EU to Non Profit Organisations0 10 20 30 40 50 60 70 80 90 100

Figure 6: Percentage of competitive grant funding awarded to companies from the EU. The darker, the higher the EU percentage. White dots show UK universities recognised in GRID. Source: Dimensions from ÜberResearch, GRID from Digital Science.

Figure 7: Percentage of competitive grant funding awarded to not-for-profit Organisations from the EU. The darker, the higher the EU percentage. White dots show UK universities recognised in GRID. Source: Dimensions from ÜberResearch, GRID from Digital Science.

ten years has been used to invest in corporate R&D projects supporting jobs and local economies. Some of the companies benefitting most are: Rolls-Royce with £51m from the EU (which represents 12.9% of research funding to the company); BT with £23.8m from the EU (representing 79.8% of research funding); and the BBC, which has won grant funding of £2.87m from the EU for its research activities, compared with £4m from UK sources.

Universities

Amongst British universities, the potential impact of Brexit looks to be widespread, with Cambridge and Oxford respectively relying on 20% and 23% of their EU & UK research body funding from the EU. Meanwhile, less research intensive institutions such as University of Greenwich have an EU/UK funding ratio of 64%/36% in favour of the EU, whilst the University of Wolverhampton’s funding represents a similar split of 67%/33%. The Russell Group of research-intensive universities has varying dependency on competitive funding from Europe. The University of Bristol is least dependent, with around 13.7% of its research funding mix coming from the EU, and the London School of Economics is most dependent with 36.3% coming from the EC and the ERC.

Those at least risk of an immediate detrimental impact include a number of specialist institutions such as the Institute of Cancer Research and the Guildhall School of Music and Drama.

Conclusion

The UK’s economy is increasingly a knowledge and information economy. Our success at gaining EU funding, not only through universities but also in business and in the not-for-profit sector, has left us with critical dependencies in key areas of the economy. Success in riding the recent economic crisis is in no small part due to the UK’s university and research sector. As a result of our current relationship with the EU, jobs are created, money flows into the country in research contracts and IP is monetized globally. Furthermore, university positions are often sought by students around the world and analysis of economic prosperity in the UK [5] shows clustering around strong research institutions.

The prospect of Brexit represents a number of very real threats to the UK’s prosperity. The result will either be Government mitigating the loss of current EU funding levels, or dealing with a rapidly changing economic landscape, where academics, businesses and the third sector struggle with substantial losses of funds, support and infrastructure.

References [1] Adams, J & Gurney, K, Digital Research Report: The Implications of International

Collaboration for UK Universities, 10.6084/m9.figshare.3029749.v3, ISBN: 978-0-9929477-4-3.

[2] States and Markets, 5.13, World Development Indicators: Science and technology. Available at: http://wdi.worldbank.org/table/5.13

[3] Research and development expenditure (% of GDP). Available at http://data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS

[4] HM Treasury, European Union Finances 2015: statement on the 2015 EU Budget and measures to counter fraud and financial mismanagement. Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/483344/EU_finances_2015_final_web_09122015.pdf#page=44 & https://fullfact.org/economy/our-eu-membership-fee-55-million/

[5] The Economic Role of UK Universities, Universities UK, 2015. Available at: http://www.universitiesuk.ac.uk/highereducation/Documents/2015/TheEconomicRoleOfUKUniversities.pdf

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