Third sector medical research plays an important role both in the Welsh economy and society.
Medical research makes huge contributions to society through developing new treatments, improving existing ones and advancing technologies that can help save lives, such as vaccines that help to fight against infectious diseases like Covid-19.
Charities are major funders of medical research. Medical research funding by charities has been estimated to be 35% of all third sector and public funding of medical research in Wales, with active research funding of £21m in 2018.
Without charity funding, the public sector would therefore need to increase their direct funding1 of health-related research in Wales by an estimated 53% to cover the shortfall.
Whilst the primary aim of medical research funding by charities is to create benefits to people’s health, the funding also makes a significant contribution to the Welsh economy:
- Recipients of research funding purchase goods and services in order to undertake their research. This generates activity in their supply chains and across the whole of the Welsh economy.
- R&D can boost output and productivity in an economy with new technologies, medicines and processes.
- As new methods and technologies are discovered, there are knowledge spill-overs into the public, private and third sectors which boost productivity and economic growth.
This report examines the first of these contributions and estimates the economic impact of medical research funding by charities on the Welsh economy in terms of jobs, output, and GVA (Gross Value Added). This includes the direct impact of research on universities and medical organisations, as well as wider impacts on supply chains, job creation and wages.
Our results estimate that in 2019, medical research funding by charities supported 975 jobs, £86m in output and £55m in GVA in Wales.
The pandemic had a significant impact on medical research funding by charities, placing jobs in research and the wider economy at risk. In 2020, the fall in medical research funding by charities is estimated to have put 100 jobs, £9m output and £6m GVA at risk in Wales.
We also estimate multipliers for medical research funding by charities. Every £1 million spent on medical research funding in Wales by charities supports:
- £2.30 million of output
- £1.47 million of GVA
- 26 jobs
Authors
James is a Fellow at the Fraser of Allander Institute. He specialises in economic policy, modelling, trade and climate change. His work includes the production of economic statistics to improve our understanding of the economy, economic modelling and analysis to enhance the use of these statistics for policymaking, data visualisation to communicate results impactfully, and economic policy to understand how data can be used to drive decisions in Government.
Ben is an economist at the Fraser of Allander Institute working across a number of projects areas. He has a Masters in Economics from the University of Edinburgh, and a degree in Economics from the University of Strathclyde.
His main areas of focus are economic policy, social care and criminal justice in Scotland. Ben also co-edits the quarter Economic Commentary and has experience in business survey design and dissemination.
Adam is an Economist Fellow at the FAI who works closely with FAI partners and specialises in business analysis. Adam's research typically involves an assessment of business strategies and policies on economic, societal and environmental impacts. Adam also leads the FAI's quarterly Scottish Business Monitor.
Find out more about Adam.
Kate is a Knowledge Exchange Assistant at the FAI working across a number of project areas. She is currently studying for her MSc in Economics at the University of Edinburgh and has a bachelor’s degree in Economics from the University of Strathclyde. Kate is also the Outreach Coordinator at the Women in Economics Initiative which aims to encourage equal opportunity and improve representation in the field.