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$20bn of research cash at risk if UK turns its back on foreign workers, PwC warns


20bn of research cash at risk if UK

Britain’s valuable position as a major research and development centre could be put at risk if the Government slams the brakes on immigration, a PwC study of major investors has found.

Big international companies rely on open borders to hire researchers from around the world – and to stock UK universities with the brightest minds.

The UK’s open position has helped it attract almost $20bn (£15bn) of “imported corporate R&D” spending per year from global companies. This makes up more than 80pc of all corporate R&D in the country.

But if it becomes tougher to get top teams of analysts across the border, then much of that could be at risk.

“To deliver innovation, many of world’s largest companies rely on shifting talent, money, and ideas across borders. If policies in the major global economic powers start to focus more inwardly, however, this would cast uncertainty over companies’ innovation plans and their current models would need to evolve,” said PwC’s John Potter.

“Uncertainty only serves to slow innovation. Given that R&D activities ultimately help to create the jobs, growth and wealth of our communities, we need to ensure clarity over policy to keep innovation centres around the world working effectively."

The USA, which has the most foreign business-funded R&D, is the most prone to “economic nationalism”, according to the study of the biggest 1,000 listed companies in the world plus a survey of 562 R&D executives.

Britain is the next most at risk, while China is the third most susceptible, the study found.

“With the Brexit negotiations under way, it’s still not clear how much the pending withdrawal from the European Union will inhibit the recruiting ability of British companies and universities,” the report said, noting that sectors such as engineering have long warned of a shortage of skilled workers.


“British university officials have warned that applications from EU students will be down in 2017, after having risen steadily in previous years.”

This is also a serious risk to the state of innovation in the wider continent, as Britain is a leader in this work – and there is no guarantee any fall in spending in the UK would move to neighbouring countries.

“Weaker R&D programs in the UK could also have a ripple effect across the region,” the report said.

“Although the end result of Brexit in the UK is unclear, the European executive quoted above expressed concern that if the UK becomes more isolated, ‘the economic power and skill of the UK might deteriorate, and Europe as a whole – not necessarily the EU – will become weaker compared with Asia and the Americas.’”

From 2007 to 2015, Europe fell down the rankings in terms of attracting global R&D investment, dropping from the top continent to the third-most popular.

However there are signs that this risk may not materialise.

Theresa May said Brexit negotiations are within “touching distance” of reaching a deal on the rights of EU citizens currently in the UK, and British citizens in other EU countries.

In the case of the US, the report found that immigrants are particularly focused in high-tech and innovative jobs – migrants make up 16.9pc of the whole workforce but 32pc of workers in computing and maths jobs and 24pc of those in science and engineering, the report said.

The vast majority of postgraduate students in these areas are also from overseas.

Policies to slash immigration could put this at risk and applications from foreign students to universities are falling.

“Other countries have responded to such developments in the US by courting international students for their own universities, publicising their more welcoming and transparent immigration policies,” the report said.

“Both Canada and Australia have revamped their policies for international students, offering streamlined application processes, easier visa and work-study rules, and more certain paths to citizenship for students who want to remain after graduation.”

Source: Yahoo


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