Research incentives key to UK competitiveness
Optimism about future growth tempered by concerns about global rivalry
The technology sector is broadly optimistic about future growth, but wants greater research and development (R&D) incentives to counter concerns about overseas competition, says research published this week.
Nearly two-thirds (63 per cent) of the companies responding to a survey by consultant KPMG said they are more confident now about the outlook for the IT industry than they were six months ago. Some 82 per cent expect a growth in sales in the next six months, and 41 per cent expect a rise in staff numbers.
But respondents cited global competitive pressures, alongside UK macroeconomic policy, as having a potentially negative impact. And most said increased public investment in science and technology education and greater tax allowances on R&D would be of benefit.
‘There is not sufficient cash incentive to make companies, particularly global players, continue to invest in the UK,’ said KPMG head of technology Crispin O’Brien. ‘There is a feeling of wariness about the existing tax credits scheme, especially when there is such a high cost of business here compared with India and China.’
Industry trade body Intellect says tax incentives must increase to have any significant impact.
‘As we move towards the knowledge economy, R&D is a key aspect of making sure the UK can compete,’ said Intellect ebusiness programme manager Beatrice Rogers.
‘The R&D tax credit needs to go from around four per cent to around nine per cent to be a genuine incentive,’ she said.
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