The House of Commons Business, Innovation and Skills committee said that 30 years of underinvestment had made the UK one of the least research-intensive economies of all advanced industrial nations.
It added that funding for science and innovation should be maintained or improved in the next spending review to ensure that the potential of the science base is not “throttled”.
Not enough is being done to harness the potential economic benefits of the university research base, according to the committee’s report Business-University Collaboration.
Adrian Bailey, chair of the committee, said: “Other countries, such as Germany, seem to get more value from their scientific activity than the UK.
“The government needs to do more to bring businesses and universities together to realise the benefits of the cutting-edge research taking place across the country.”
Mr Bailey said that in 1979 the UK was one of the most research-intensive economies in the world and now – among advanced industrial economies – it is one of the least.
“If the UK is going to punch its weight in the global economy, and help our businesses succeed in international markets, the government needs to bridge this structural gap in research and development funding,” he added.
In 2012 the government invested 1.72 per cent of GDP on research and development, which is significantly less than other countries with similar economies, the committee says. The US, for example, spends 2.80 per cent of GDP on research and development each year, Germany 2.84 per cent and France 2.25 per cent.
Mr Bailey said: “To ensure the economic potential of our science base isn’t throttled, we call on the government to protect the science budget in the next spending review.”
He added that the government should use the Science and Innovation Strategy, due to be published later this year, to set out its plans for the innovation system and “articulate an ambitious vision for this sector”.
The report also calls for the introduction of an impartial method to monitor its progress at boosting research and development activity.
