Research and development (R&D) techniques and innovations

The landscape of research and development (R&D) is undergoing a significant shift, as a new report by Professor Hasan Bakhshi MBE, Director of Creative PEC, challenges the traditional image of researchers as exclusively scientists or engineers. The report, titled The Art of R&D, was commissioned by the Creative Industries Council and is part of the PEC's Spotlight on R&D Week that ran from the 14th - 18th January.

The report highlights the importance of understanding the migrant and skills needs of creative businesses in the context of Brexit and changing trade relationships. It also emphasises the need to update the definition of R&D to include innovation in the arts, humanities, and social sciences (AHSS), to be eligible for tax relief. Currently, the UK does not provide specific R&D tax relief for innovations in the AHSS, as advances in these fields do not qualify for such tax incentives under the UK’s R&D tax credit schemes designed primarily for science, technology, engineering, and mathematics (STEM) areas.

The report argues that the UK needs to follow the example of countries like Austria, Germany, Korea, and Norway, which have varying levels of support or tax incentives for research and innovation. While these countries also favor STEM and technology sectors, they offer dedicated tax relief mechanisms for arts, humanities, and social sciences R&D. For instance, Austria and Germany have R&D tax credit schemes primarily targeting technological and industrial innovation, with the humanities and social sciences not in the main scope. Similarly, Korea strongly supports innovation via direct grants and technology-focused tax incentives but does not extensively extend R&D tax relief explicitly to humanities or arts innovation. Norway also emphasizes technology and applied science innovation in its tax incentive schemes, with limited specific support for arts and social sciences R&D at the tax relief level.

The Australian context, referencing a recent submission from the Council for the Humanities, Arts and Social Sciences, illustrates the ongoing challenge: HASS disciplines often feel marginalized within general research funding and tax relief frameworks, which tend to privilege applied and STEM research.

The report's findings may impact the recruitment practices and skills development strategies of creative businesses in the UK. Moreover, it is essential to recognise the strong evidence that the creative industries are a highly innovative and productive sector. The Worldwide exports of creative goods exceeded $500 billion USD in 2015, with a 150% increase since 2000, indicating the significant economic potential of the AHSS sector.

As the UK government has committed to increasing the amount of public money spent on research and development, it is crucial to ensure that the AHSS sector is not overlooked. The report suggests that dedicating tax relief mechanisms for innovation in the AHSS could stimulate growth and productivity in this sector, benefiting the UK's economy as a whole.

The landscape of research and development (R&D) is experiencing a significant shift, according to a report by Professor Hasan Bakhshi MBE, Director of Creative PEC, titled The Art of R&D.
The report, part of the PEC's Spotlight on R&D Week, highlights the importance of understanding the migrant and skills needs of creative businesses in the context of Brexit and changing trade relationships.
The need to update the definition of R&D to include innovation in the arts, humanities, and social sciences (AHSS) for tax relief is emphasized in the report.
Currently, the UK does not provide specific R&D tax relief for innovations in the AHSS, as advances in these fields do not qualify under the UK’s R&D tax credit schemes designed primarily for science, technology, engineering, and mathematics (STEM) areas.
The report argues that the UK should follow the example of countries like Austria, Germany, Korea, and Norway, which have varying levels of support or tax incentives for research and innovation.
For instance, Austria and Germany have R&D tax credit schemes primarily targeting technological and industrial innovation, with the humanities and social sciences not in the main scope.
The report's findings may impact the recruitment practices and skills development strategies of creative businesses in the UK, as they recognize the strong evidence that the creative industries are a highly innovative and productive sector.
As the UK government has committed to increasing the amount of public money spent on research and development, it is crucial to ensure that the AHSS sector is not overlooked, and dedicating tax relief mechanisms for innovation in the AHSS could stimulate growth and productivity in this sector, benefiting the UK’s economy as a whole.