UK sector innovations in 2021 | What’s next for energy and transport?

The UK government has committed to raising R&D investment. With a goal of R&D spending reaching 2.4% of GDP by 2027, this ambitious target will require public investment as well as business investment. 

The impetus for R&D spend comes under two categories – building on strengths, and action needed. These are the two factors that drive companies, and governments, to make R&D investments. So, the investment is spurred on by an industry or product already leading the global market or a desire to bring up the standards to better compete.

This article will look at energy and transport in particular for a brief overview of their current and predicted levels of R&D innovation.

Transport

The Transport sector is under growing pressure to innovate, for climate consciousness amongst other reasons. Whether it’s to tackle the government’s Zero Emissions by 2050 target, the public pressure to provide greener and more innovative alternatives, or the desire to keep up with globally innovating markets, the industry has a distinct impetus for R&D spend. Transport equipment manufacture (including aerospace and motor vehicles) is the second-largest sector when it comes to R&D expenditure. However, current activity has fallen here drastically in the past year, with the sector shrinking by 38%, in the wake of COVID-19.

R&D innovation in the transport sector is bound to recover to some extent as ‘usual’ life resumes post-vaccine, although it’s a sector which is expecting the post-vaccine landscape to be considerably altered. The impact on older technologies like petrol and diesel automotive manufacture is likely to be felt harder than the impact on newer firms who are working towards greener initiatives.

The UK aerospace supply chain is being supported and strengthened by several programmes. The Aerospace Growth Partnership’s “Sharing in Growth” programme provides four years of business support for mid-sized companies, and its “National Aerospace Technology Exploitation Programme” (NATEP) supports tech development by providing innovation funding and also mentoring from larger companies. 

Motorsport is a sector in which the UK has a significant history. A distinct buzz of R&D activity and a strong skills base reside in the motorsports industry here, partly due to seven out of ten current F1 teams using UK bases.

Cross-sector Transport innovations

Recently, BAE and Go-Ahead’s London buses have worked together on cross-sector R&D innovation.

Working with ADL, a leading coach and bus builder, BAE helped to deliver 39 ultra-low emissions buses, for the London bus fleet of Go-Ahead. Integrating BAE’s cutting edge systems of electrification technology, the buses have cut greenhouse gas emissions by 37% compared to the conventional diesel-run buses that were their predecessors.

Energy

Internationally, government energy R&D spending grew by 3% in 2019, as we saw steady investment in China (as part of the 13th Five Year Plan draws to a close) and considerable expansion through Europe and the US. According to this IEA graph, 80% more public energy R&D went into low carbon solutions compared to in the year before. 

In terms of real-time recovery from the impact of the COVID pandemic, the energy sector may take longer to recover, due to workplace demographics. The energy sector’s most experienced staff are often older and may thus be required to shield for a longer duration. 

Cross-sector Energy innovations

An Edinburgh-based startup firm called Act Blade, with a team from the yacht industry, decided to take their cutting-edge yacht sail textiles into the energy sector. They use the textile to make wind turbine blades, which have the potential to be 50% lighter than the current standard fibreglass blades, increasing energy production by almost 10%. With the help of The Offshore Renewable Energy Catapult, Act Blade gained advice on both the wind energy market and how to attract investors, as well as testing facilities for these new blades.

Although R&D investment across all industries is likely to be stymied by the impact of the pandemic, many sectors will be called upon in the aftermath to build the ‘new normal’, and to get the country back on track to reach various government policies and targets, for example, the Road to Zero.

Arrange a free consultation with our team of experienced and approachable tax incentive advisors today. At Kene Partners, our mission is to help innovative companies access millions of pounds of government money set aside to foster innovation. Your business could be next.