Government · UK · Office for National Statistics
UK R&D Spending Hits £79.4bn but Slips to 2.71% of GDP
UK organisations spent £79.4bn on research and development in 2024, up £3.6bn on the year, yet R&D slipped to 2.71% of GDP for the second year running. The growth was funded disproportionately from overseas.
Source published Summarised
Key findings at a glance
- £79.4bn spent on research and development performed in the UK in 2024
- £3.6bn increase in UK R&D expenditure between 2023 and 2024
- 2.71% UK R&D expenditure as a share of GDP in 2024, down from 2.72% in 2023
- 2.73% the equivalent share of GDP in 2022, the start of the accredited series
- £55.6bn of R&D performed by the business sector in 2024
- 70% share of all UK R&D performed by businesses
- £17.9bn of R&D performed by the higher education sector
- 23% share of all UK R&D performed by universities
- £4.7bn of R&D performed by the government sector, including UK Research and Innovation
- £1.2bn of R&D performed by private non-profit organisations, the smallest sector
- £8.9bn of UK R&D funded from overseas in 2024, up from £7.2bn in 2022
- 78% of business-performed R&D was funded by businesses themselves
What the report covers
The Office for National Statistics published its gross domestic expenditure on research and development (GERD) figures for 2024 on 7 August 2026. GERD is the headline measure of how much R&D is actually carried out inside the UK, covering four sectors: business enterprise, higher education, government (including UK Research and Innovation) and private non-profit organisations. It measures R&D performed here regardless of who owns or ultimately uses the output.
The sector split is heavily weighted towards business. Firms performed £55.6bn of the £79.4bn total, or 70%. Universities accounted for £17.9bn (23%), government for £4.7bn (6%) and private non-profits for £1.2bn (1%). Cash spending rose 4.8% on 2023, but because GDP grew slightly faster, R&D intensity edged down to 2.71%. The ONS is explicit that this dip reflects movement in GDP rather than any retreat in R&D itself.
The more interesting number sits in the funding tables rather than the performance ones. Overseas sources funded £8.9bn of UK R&D in 2024, up from £7.2bn in 2022, a 25% rise in two years and the fastest growth of any funding source. Almost all of it (£8.4bn) went into business-performed R&D. Meanwhile UK business funding of R&D, measured in constant prices, sat at £45.1bn in 2024 against £46.2bn in 2022. Domestic business money going into R&D has not yet recovered in real terms, which is a different story from the one the headline total tells. It also rhymes with the ONS data on UK business AI adoption, where headline uptake climbs while the depth of investment lags.
What this means for UK marketers
R&D statistics are not an obvious marketing story, and it is worth being straight about that. They matter here because they size and describe a buying market. If you sell to UK businesses, £55.6bn of annual business R&D is the budget line most closely correlated with appetite for anything new: new tooling, new platforms, new partners. Its direction of travel tells you how receptive that market will be over the next 12 months.
The useful detail is that 78% of business-performed R&D is funded by the businesses doing it. This is largely self-funded, internally justified spending, not grant money. That has a direct consequence for how you pitch. Buyers in R&D-intensive sectors are defending these budgets internally against a finance function, so proposals that lean on novelty will lose to proposals that carry a defensible payback figure. Lead with the business case, not the technology. Where a client can offset cost through HMRC R&D tax relief, that is worth surfacing early rather than treating as an accounting afterthought.
The overseas funding number is the one to act on. £8.4bn of foreign money now flows into business-performed R&D in the UK, growing far faster than domestic business funding, which is still below its 2022 level in real terms. For UK B2B brands, that means a meaningful and growing share of the decision-makers controlling R&D-adjacent budgets sit outside the UK, or report to someone who does. Practically: stop assuming a UK-only search and content footprint reaches the whole buying committee. Check whether your organic visibility holds up on non-UK search results, whether your case studies read to someone unfamiliar with the UK market, and whether your site makes the parent-company case as clearly as the local one. This is the kind of gap that an international-aware SEO strategy is built to close, and it rarely shows up in a UK-only rank tracker.
Finally, treat the flat R&D intensity as a demand signal rather than a headline. Spending is growing in cash terms while standing still relative to the economy. That is a market expanding at roughly the rate of everything else, which means share is taken from competitors rather than handed out by growth. It sits alongside the skills constraint we covered in the DSIT work on the UK digital talent gap: the money is there, the capacity to spend it well is the bottleneck.
How they got the data
GERD is compiled by the ONS from four separate collections, one per sector. Business R&D comes from the Business Enterprise Research and Development (BERD) survey, higher education R&D is derived from the Transparent Approach to Costing (TRAC) return that universities already complete, government R&D comes from the GovERD collection covering government bodies and UKRI, and the private non-profit sector is surveyed separately. Definitions follow the OECD’s Frascati Manual, the international standard for R&D statistics, which is what makes the figures comparable with other OECD countries.
Two caveats are worth carrying into any use of this data. First, the series only runs from 2022. The ONS redeveloped its business and higher education R&D statistics and the Office for Statistics Regulation redesignated them as accredited official statistics from the 2022 reference period, so earlier years are not published in this release and are not directly comparable. Second, the ONS publishes figures in both current and constant prices using an R&D-specific deflator (93.39 in 2022, rising to 100 in 2024). Cash and real-terms readings diverge noticeably, and the real-terms series is the one that shows domestic business funding still sitting below its 2022 level. Quoting only the cash figures overstates the recovery.
Government · UK
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From Office for National Statistics · published 07/08/2026