Home Think Tank Policy Repositioning research
Policy · Submission for the Autumn Budget 2026
Smart incentives, strategic growth: turning thought leadership into the backbone of 21st-century British prosperity. Our policy submission sets out five proposals to recognise — and incentivise — research and thought leadership as economic infrastructure.
buildresearch.co.uk/policy-repositioning-research
For decades, UK fiscal architecture, accounting frameworks and corporate governance have treated much of the research, market intelligence and thought leadership that guides business as discretionary overheads — expanded in good times and cut first in a downturn.
Just as transport links, power grids and digital broadband networks move goods, energy and data, the UK’s research infrastructure drives economic and scientific innovation, inspires enterprise and informs business resilience — and influences where, when and how capital is deployed.
In a knowledge-intensive economy, where much of a company’s value lies in intangible assets, the submission argues that research and thought leadership are an essential component of the UK’s economic infrastructure — and that tax and fiscal policy should recognise them as such.
| Old paradigm: administrative cost | New paradigm: economic infrastructure |
|---|---|
| Discretionary overhead budget | Capital asset driving asset value |
| Cyclical: slashed immediately in economic downturns | Counter-cyclical: expanded during uncertainty to de-risk investment |
| Concentrated in central London corporate headquarters | Distributed across regional innovation clusters |
| Narrow focus on physical labs | Encompasses applied market, social & economic research |
The quality of an economy’s capital deployment cannot exceed the quality of the research guiding it.From the report
Five targeted interventions, designed for inclusion in the Autumn Budget 2026, to encourage corporate research and thought-leadership investment across the UK. These are proposals to government, not current policy.
Full Expensing for intangible research assets, proprietary datasets and systemic risk models — the same tax-advantaged status as physical plant and machinery. Companies investing in early-stage strategic research, or commissioning independent industrial analysis, could write off 100% of that expenditure in Year 1.
A geographically tiered tax incentive: UK-registered businesses could claim a 150% tax deduction on research, white papers, market intelligence and feasibility studies carried out in partnership with regional universities and research institutes outside London and the South East.
A £250 million co-investment mandate through the British Business Bank, matched 50/50 by private-sector consortiums undertaking industrial research, market analysis and macroeconomic policy studies — on the condition that all resulting insights are published open access.
Opening R&D Tax Relief to broader social science, economic and managerial research — including trade, finance and market research — so the scheme reflects how innovation happens in a modern economy that is 80% services-based.
A “Research & Growth Voucher” programme granting high-growth SMEs and mid-market firms vouchers worth up to £25,000 to bring in embedded academic fellows, policy researchers or specialised thought-leadership partners for set-period strategic research projects.
| Proposal | The measure | Objective | Who benefits | Implementation lead |
|---|---|---|---|---|
| Proposal 1: “Research-to-Commercialisation” capital (intangible) allowances | Full Expensing for intangible research assets: 100% of the spending written off in Year 1 | Private capital mobilisation | Enterprise businesses, tech & data firms | Corporate Tax Policy Directorate |
| Proposal 2: The Regional Thought Leadership & Innovation Super‑Deduction | A 150% tax deduction for research with regional universities and institutes outside London and the South East | Spatial rebalancing & regional growth | Regional universities, corporate R&D, regional mid-caps | HMRC / Local Government Policy Team |
| Proposal 3: The National Sovereign Knowledge & AI Insights Fund | A £250 million co-investment mandate through the British Business Bank, matched 50/50 by private-sector consortiums, on condition that all resulting insights are published open access | SME productivity & open innovation | Business consortiums, high-growth SMEs | British Business Bank / Department for Business, Innovation, Science and Trade |
| Proposal 4: Updating the R&D Tax Relief guidelines | R&D Tax Relief opened to social science, economic and managerial research | Service sector modernisation | Professional services, fintech, social research | HMRC Innovation & Reliefs Team |
| Proposal 5: Talent Mobility & Knowledge Transfer Vouchers for SMEs | Research & Growth Vouchers worth up to £25,000 to bring in academic fellows, policy researchers or thought-leadership partners | Talent mobility & enterprise scaling | Scale-up SMEs, post-graduate researchers | Department for Business, Innovation, Science and Trade |
Select a proposal to read it in full.
BuildResearch’s estimates for the five measures together, from the full report
These are BuildResearch’s own illustrative estimates over five years, not OBR or government figures. The full report (PDF, 29 pages, 2.7 MB) sets out each proposal’s estimated costs and benefits, and the main assumptions behind them.
Research intensity — how much a country spends on research and development each year, as a share of its GDP — is how nations signal their ambition. On 2024 figures the UK came fifth in the G20, only just ahead of China. Above it were Germany, Japan, the United States and, leading the table, South Korea.
That margin is unlikely to last. China’s research intensity rose 0.11 points to 2.69% in 2024. On current trends Britain is set to slip from fifth to sixth in the G20, and the leading group may pull further away as it competes harder for resources, talent, ideas and investment.
The report’s illustrative estimate is that, had the UK matched German or US research intensity, it would be investing roughly £12–20 billion more each year.
| Country | Share of GDP |
|---|---|
| United States 2023 · National Science Foundation (NCSES) | 3.4% |
| Germany 2024 · Destatis | 3.17% |
| United Kingdom 2024 · Office for National Statistics | 2.71% |
| China 2024 · National Bureau of Statistics of China | 2.69% |
The UK’s 2025 figure has not yet been published. Germany’s figure is Destatis’s estimate for 2024 (March 2026); the OECD’s provisional estimate is 3.13%. Germany’s 2025 coalition agreement sets a target of at least 3.5% by 2030.
Strategic thought leadership and high-level business consulting have historically concentrated in London and the South East. Many mid-market firms and SMEs in the Midlands, the Northern Powerhouse, Scotland and Wales operate with limited research infrastructure.
Incentivising corporate research partnerships with regional universities and research bodies anchors high-value strategic decision-making in regional innovation clusters — a self-sustaining ecosystem of skilled analyst roles, academic spinouts and data-driven investment.
The knowledge infrastructure flywheel: how policy reform compounds into productivity growth.
The literature review that accompanies the report summarises the academic evidence on the economic returns to research and development.
The most likely private rate of return to R&D in developed economies, from a survey of decades of studies
The social return, once knowledge spillovers to competitors and consumers are counted — often much higher than the private return, though estimates vary widely
Average long-run social gain from each dollar invested in innovation in the US, on conservative assumptions — possibly far more
Nobel laureate Paul Romer’s endogenous growth theory explains why: technological progress comes from people and institutions deliberately investing in research, and one person or company using a new idea does not stop another from using it at the same time. Other businesses learn from it and build on it without paying its full cost, so the benefits spill over and lift productivity across the economy — and markets alone invest too little in research.
Full report
The full submission: the macroeconomic case for treating research as economic infrastructure, how it fits the Treasury’s mandate, the five Budget proposals and their estimated impact, a policy impact matrix and the combined economic and fiscal picture.
Summary
The argument in brief: the UK’s competitive position, the five reforms with their headline estimates, and their combined impact over five years.
Literature review
The academic evidence on the private and social returns to research, from Hall, Mairesse & Mohnen to Jones & Summers and Paul Romer.
Regional
The regional dimension of the proposals: research, growth and productivity beyond London and the South East.
The regional report is in preparation. Ask to hear when it’s published, or request a briefing on the proposals for your organisation. You can also email buildresearchclients@outlook.com.
These are proposals to government, not current policy. Nothing here is tax, legal or investment advice.
For media enquiries, or a document in another format, email buildresearchclients@outlook.com.
BuildResearch (2026) Repositioning research to be a key component of the UK’s economic infrastructure. A BuildResearch policy submission for the UK 2026 Autumn Budget. BuildResearch Limited, October 2026. Available at: https://buildresearch.co.uk/policy-repositioning-research
We stand ready to work with HM Treasury, regional combined authorities and industry partners to model, refine and deploy these reforms.
