Strong investment in the telecommunications sector has helped push the UK’s research and development (R&D) spending ahead of the global average.

Fixed-line telecoms reported the largest growth in annual funding as investment increased 54 per cent to £1.1bn, according to the 2007 R&D Scoreboard, published by the Department for Innovation, Universities and Skills this week.

Overall, the UK’s top 850 R&D companies invested £20.9bn, up nine per cent on the £19.1bn spent in 2005.

The top 75 organisations for research grew their budget by 11.9 per cent, ahead of the world average of 10 per cent.

BT led the growth in telecoms R&D, investing more than £1.1bn. The company has increased its research spending by 128 per cent since 2002.

“It’s very easy for a large company to simply stay where it is and show lots of profit in the short term,” said Mike Carr, BT’s chief science officer.

“You have to make enough profit to keep the shareholders happy, but you also need to give them the belief that you are investing in your future.”

Innovation will be a key driver of UK prosperity in the decades ahead, according to Ian Pearson, minister of state for science and innovation.

"The scoreboard shows that we are putting the government’s money where our mouth is,” he said.