Both the ONS and Eurostat have released data on Research & Development (R&D) activity for 2024. In the UK, business-sector R&D expenditure grew by +4.5% compared with 2023, while the EU recorded an increase of +3.6%. In the UK, the largest R&D-spending industry was software development, with the automotive sector also making a notable contribution.
Direct comparison between the two data releases is limited by differences in methodology. The ONS focuses on expenditure values, whereas Eurostat reports R&D intensity – R&D spending expressed as a share of GDP. In addition, the ONS figures cover only the business sector, while Eurostat reports for the whole economy. This note summarises key findings from both sources.
Total UK business R&D expenditure in 2024 is estimated at £55.62 billion, an increase of +4.5% from 2023. The manufacturing sector accounted for 49% of this total – well above its share of the wider economy – highlighting its importance. Spending by the manufacturing sector grew by +5.0%, outpacing the overall increase across the economy. The service sector represented 46% of total R&D expenditure, with the remaining 5% coming from agriculture, extraction, utilities and construction.
Within manufacturing, pharmaceuticals was the largest contributor, responsible for 34% of all manufacturing R&D spending. The automotive sector followed with 19%, ahead of aerospace at 8% and machinery/mechanical engineering at 6%. Larger firms undertook most of this activity: companies employing more than 1,000 people accounted for 59% of all manufacturing R&D expenditure.
Eurostat’s main measure, R&D intensity, stood at 2.24% of GDP for the EU in 2024. This was slightly lower than the 2.26% recorded in 2023, but higher than the 2.09% reported in 2014. The peak of 2.28% in 2020 was influenced by substantial pandemic-related R&D, especially in the pharmaceutical sector. Expressing data as a share of GDP helps reduce the impact of inflation, as both R&D expenditure and GDP are measured in current prices.
Despite recent increases, EU R&D intensity in 2024 remained below the levels seen in several major global economies. Japan recorded 3.44% and the United States 3.45%, while South Korea reached 4.96% and China 2.58%. Eurostat does not provide a directly comparable figure for the UK.
Within the EU, Sweden recorded the highest R&D intensity in 2024 at 3.57%, followed by Belgium at 3.36% and Austria at 3.26%. Finland, Germany and Denmark also posted high levels at 3.22%, 3.13% and 3.01% respectively. At the other end of the scale, seven countries reported R&D intensities below 1% of GDP: Romania (0.46%), Malta (0.51%), Cyprus (0.65%), Bulgaria (0.77%), Latvia (0.92%), Slovakia (0.98%) and Luxembourg (0.99%). Six of these countries joined the EU in 2004 or later.
Eurostat does not provide R&D expenditure by industry, only by broad sector. In 2024, the business enterprise sector remained the largest contributor to EU R&D spending, accounting for 66.5% of the total. It was followed by the higher education sector at 21.4%, the government sector at 10.8%, and the private non-profit sector at 1.3%.
The UK data can be found on the ONS website at https://www.ons.gov.uk/releasecalendar (28 November) while the Eurostat data, which is not in their usual series, is available as a summary on their website at https://ec.europa.eu/eurostat/en/web/products-eurostat-news/w/ddn-20241211-2 with a link to the more detailed article at the bottom of this page; both of these can be requested from MTA.