The economic benefits of chemistry research to the UK


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  • The Engineering and Physical Sciences Research Council and the Royal Society ofChemistry commissioned an independent study to examine the many channels through which chemistry research contributes to the UK economy and to provide a quantitative and qualitative analysis of just how much it benefits the UK. Here is a summary of the key findings of the resulting report, prepared by Oxford Economics.The evidence presented in the report shows that the direct and indirect (‘spillover’) benefits from fundamental chemistry research are significant to the UK. More crucially, it will be the outcomes of this fundamental research that will be a vital ingredient in helping to answer important technical and societal challenges facing the UK in the years ahead.
  • Chemistry-reliant industries contributed £258 billion value-added to the UK economy in 2007– equivalent to 21% of UK GDP – and supported 6 million jobs, accounting for atleast 15% of the UK’s exported goods and attracting significant inward investment.Furthermore, the quality of UK chemists and the reputation for excellence of the UK’sscience base significantly influences companies choosing to locate in the UK, or toretain a UK-based research presence.The UK’s chemistry-reliant industries can be split into two categories: the ‘upstream’,consisting of chemical-producing industries; and 15 identified ‘downstream’, chemical-usingindustries (which include, for example, the aerospace, automotive, electronics, health andtextiles industries).
  • The employment multiplier for the upstream chemicals industry is estimated to be around 3.022. This means that for every 10 jobs directly supported by the UK upstream chemicals industry, another 20 in total are supported indirectly in the supply chain and from induced spending of those directly or indirectly employed by the upstream industry. The employment multiplier is higher than most other industries. This reflects the above average productivity of those employed in the upstream industry, and hence above average wages paid to employees in the upstream industry (mean annual grossearnings in the upstream industry was £33,991 in 2008, 30 % higher than the whole economy average of £26,020)23.Furthermore, the UK has many world leading chemistry research departments. According to the latest (2008) Research Assessment Exercise (RAE), the UK has 12 higher education institutions whose chemistry and chemistry-related departments classed as world-leading or internationally excellent. These institutions employ over 600 top-level research staff, slightly over half such staff spread across all UK university chemistry departments.Research by Vitae (2009) showed that the UK’s universities produced more UK-domiciled chemistry doctoral graduates than any other subject, with the exception of clinical and pre-clinical medicine. Analysis of the first destinations of this group32 shows that research remains an important occupation once study is completed, with 60% of doctorate leavers entering research-based jobs, half of whom enter research outside of academia (Figure 4-1).
  • For comparison 43% of all doctoral leavers in engineering and physical science remained in research-based positions.The most popular sector of the economy for chemistry doctoral leavers is the manufacturing sector, which encompasses pharmaceuticals, accounting for 43% of all leavers – the highest proportion for all subjects. 33% of leavers remained in the education sector, which was the second lowest of all subjects.Reflecting the movement of doctoral leavers into manufacturing, many of the 200,000 workers in the upstream industry are highly qualified scientists and engineers. Within the UK economy, the upstream industry is in the top five industrial sectors in terms of the proportion of the workforce who are educated to at least degree level. Almost 40% of employees in the upstream industry hold a first degree or higher, which is almost 50% higher than the equivalent figure for employees across the UK economy as a wholeAn industry employing a highly qualified workforce is typically placed among the most highly productive industries. Highly productive industries and productivity growth are crucial to the UK economy. The upstream industry meets both criteria.Labour productivity in the upstream industry in 2007 was around £83,500 per worker, which was more than double the UK average (£37,500). Furthermore, productivity growth in the upstream industry has been faster than for the UK economy, averaging 5.5 % a year in real terms, almost three-times the rate of productivity growth for the UK economy as a whole.Industries that are highly productive generate more economic activity per worker for the economy and, hence, raise living standards and are key to wealth creation in the future. “…high value added, high tech, high skilled, science-driven products andservices are the key to wealth creation in the future” Gordon BrownA number of interviewees said that the reason why their businesses continued to operate in the UK was significantly dependent on the availability of talent – either for solving specific problems or as a pool of skilled workers from which they could source staff for key positions within their businesses.Undertaking this research in universities, research centres and in industry ensures that the UK maintains a highly skilled and innovative workforce and is well placed to adopt and advance new ideas, successfully exploit new technologies and develop new and better products and services.UK chemistry PhD programmes are recognised by industry as providing an innovative workforce able to pose andanswer difficult questions. Stakeholder interviews suggest that UK postgraduate training in chemistry provides an edge in the corporate world: a remarkable number of UK-trained chemistry PhDs either occupy senior positions in leading multi-national companies such as BP and Novartis, or have set up successful spin-out companies to exploit their PhD research.
  • This extended to the general feeling that there is something particular about post-graduate training inthe UK that provides an edge to UK-trained chemists in the corporate world, with the prominent globalroles played by UK chemists in a number of multinational pharmaceutical companies cited as aspecific instance of this effect. The EPSRC Industrial CASE award programme was often cited bystakeholders as a very useful tool to gain exposure to the UK science base.More generally, chemistry graduates with PhDs also contribute significantly to some of the UK’slargest research discoveries. For example, section 4.8 of this report sets out the involvement of UKPhD trained chemists in the discovery of many blockbuster drugs in the UK over the past 40 yearsthat have led to peak year ‘global sales’ of over $25 billionAs part of this, the UK PhD program (including CASE awards described in the next section) wasviewed as working particularly well and providing positive benefits for the UK. This period of trainingwas recognized by industry as giving UK-trained chemists a “fundamental understanding of theprocesses and mechanisms of how molecules interact”, and teaching and developing the skillsneeded to pose and answer difficult questions. It will be well-trained scientists with a fundamentalunderstanding of chemistry who can “manage the molecule” and who will be pivotal to answer the keysocietal challenges facing the UK over the years ahead.Such research will also help maintain the UK’s thriving research community, both within academia,but also with industry research departments. This in turn will attract the best international researchersto the UK and in doing-so further establish the UK as a place to conduct research; indeed there arean increasing number of non-UK nationals coming to the UK to be part of this community.And following on from this, ensuring that the UK has a highly skilled research base will help facilitatehigh quality R&D activity in the UK, and so maximize the spillover or ‘social’ returns from R&D activityin the UK, particularly within the upstream R&D intensive industry.
  • The economic benefits of chemistry research to the UK

    1. 1. The economic benefits of chemistry research to the UK<br />Charlotte Ashley-Roberts, RSC<br />
    2. 2. Chemistry in the UK<br />Chemistry reliant industries contributed<br />£258bn (value-added) to the UK economy in<br />2007<br />This means:<br />21% of UK GDP<br />6 million jobs supported<br /><br />
    3. 3. Upstream vs Downstream<br /><br />
    4. 4. What does this mean for our students?<br />
    5. 5. 4 pictures<br /><br />
    6. 6. CASE Awards<br />These were highly valued by companies and researcher alike and seen as a <br />great strength and distinguishing feature of UK chemistry. In particular :<br />Enables researchers to build on their fundamental understanding<br /> Offers a means of recruitment<br />Supports the transfer of individuals from academia to industry<br />Offers a low cost environment for industry to conduct more research<br />Outside the CASE award system, industry collaborates with academia through the direct funding of graduates and post-graduates. <br /><br />