The UK Government is set to announce an £86bn investment in research and development (R&D) as part of a long-term strategy to stimulate economic growth.
Chancellor Rachel Reeves will outline the funding package in the forthcoming Spending Review, pledging more than £22.5bn per year in R&D by 2029 to 2030.
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The investment forms a key element of the government’s wider “Plan for Change” and its Modern Industrial Strategy, with a focus on emerging sectors including life sciences, artificial intelligence (AI), advanced manufacturing, and defence.
The funding will support breakthroughs in areas such as drug discovery, battery technology, and AI, with the aim of generating jobs, improving public services, and attracting further private investment.
According to the government, each £1 invested in R&D returns up to £7 to the UK economy, and early-stage support for businesses has been shown to increase both employment and turnover by more than 20% in subsequent years.
A significant portion of the funding, up to £500m, will be allocated to support regional innovation across the UK. Through the new Local Innovation Partnerships Fund, local leaders will be empowered to establish ‘innovation clusters’ tailored to regional strengths, aiming to unlock local talent and support high-skilled job creation.
Examples cited by the government include Liverpool’s life sciences sector, Northern Ireland’s defence manufacturing expertise, and South Wales’ semiconductor design capabilities.
The regional approach builds on the earlier Innovation Accelerator pilot scheme, which has supported projects such as faster diagnostic tools in Greater Manchester and AI-driven rail disruption simulations in the West Midlands.
As part of the broader initiative, nearly £5m will be invested to forge a new partnership between Manchester and Cambridge, with the aim of enhancing collaboration, attracting business investment, and serving as a model for international best practice.
Peter Kyle, science and technology Secretary, said: “R&D is the very foundation of the breakthroughs that make our lives easier and healthier – from new medicines enabling us to live longer, more fulfilled lives to developments in AI giving us time back, from easing our train journeys through to creating the technology we need to protect our planet from climate change.”
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