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It is possible to make a connection between the US ’ s focus on maths and science education and its dominance of tech – although it took many years before the benefits of this strategy became apparent
Research and destroy Another way to look at it is how much companies are spending on R & D ( research & development ) as a percentage of revenue . Uru notes that R & D has become more important as businesses have become less capital-intensive and barriers to entry have shifted towards intangible assets . “ The FTSE 100 ’ s spend on R & D has slightly decreased over the last decade to around 1.3 per cent ,” the manager says . “ In comparison , the average S & P 500 company ’ s spend has risen to 3.7 per cent .” But again , R & D spend is likely to be a symptom rather than the cause of the UK market ’ s lack of progress . After all , HSBC or Diageo could hardly be expected to grow 10-fold over the next decade if they tripled the amount they spent on developing new banking services or brands of whisky . What is more pertinent is three of the five US tech giants mentioned previously are less than 30 years old ; this raises the question of why the UK hasn ’ t produced any start-ups that are capable of delivering such explosive growth .
No easy answer Michael Crawford , chief investment officer at Chawton Global Investors , says this comes back to innovation – or more accurately , the lack of it . “ This cannot be quickly or easily addressed , but the US experience suggests it can be improved by well-directed government research programmes , working with universities to better bridge the gap between research and commercial development ,” he says . This is a view echoed by Richard Penny , manager of the TM CRUX UK Special Situations fund . He believes it is possible to make a connection between the US ’ s focus on maths and science education and its dominance of tech – although it took many years before the benefits of this strategy became apparent . This all began in 1957 when the Soviet Union beat the US to the launch of the first man-made satellite , Sputnik .
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