Beyond the Golden Triangle

The majority of UK Research and Development (R&D) spending takes place in a geographic area bounded by Oxford, Cambridge and London, known colloquially as the ‘Golden Triangle’. This is a long-standing feature of the UK economy. On the one hand, the Golden Triangle is responsible for driving a large proportion of the UK’s overall innovation activity, particularly in science-based and high-tech industries. This has a positive contribution to the UK economy in and of itself. On the other hand, many argue that the Golden Triangle has received a disproportionally large and sustained level of public R&D investment. This has developed a critical mass of R&D infrastructure such as Universities, science labs and clusters of high-tech firms, which is largely unavailable to firms in other UK regions.

Government financial support for R&D provided directly to firms is designed to incentivise businesses to engage in new and larger R&D projects. Such support typically drives innovation which would not have taken place in the absence of the support. This has important benefits for the wider economy. The UK government takes this seriously, providing approximately £7 billion per year through in R&D tax credit support, which help firms by essentially making R&D cheaper. However, in a context where R&D is highly imbalanced throughout the UK, there is a risk that this type of R&D support could inadvertently widen the gap between the Golden Triangle and the rest of the UK. While firms in the Golden Triangle have access to R&D tax credits and all of the unique R&D resources build up over decades, firms in the rest of the UK do not have the same access to the latter factor. Therefore, this report evaluates the impact of R&D tax credits on firm-level innovation, focusing on differences in impact between firms located within and outside of the Golden Triangle.

A key outcome from the report is to build an evidence base on firm-level R&D and innovation impacts associated with the Golden Triangle.

To download the Executive Summary and/or the full report click the buttons on the right.