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UK taxpayer funding for areas such as video games and artificial intelligence will increase by up to 100 per cent as Britain’s research funding agency reprioritises its budget to boost the economy.

Sir Ian Chapman, chief executive of UK Research and Innovation, rated his agency only “three out of 10” in promoting growth so far as he set out plans to tie funding more closely to sectors prioritised by ministers.

Ten sectors — including defence, the creative industries, professional services, life sciences and green energy — will share £12bn in funding over four years. The overhaul of how UKRI spends money is designed to support the industrial strategy set out by the UK government earlier this year.

The government has promised a 14 per cent increase in research spending by 2029-30, to an annual total of £10bn, and Chapman told the Financial Times he wanted to plough “pretty much all” of the increase into projects that had the potential to boost growth.

Pure academic funding, through research councils and other bodies, will remain broadly stable at £14.5bn over the next four years.

Chapman said that Britain’s research infrastructure was a “latent asset that we could sweat more to drive our economy at large”, saying the new spending plan was “being very overt that what we’re trying to do is drive the economy”.

AI will be allocated £1.6bn over four years, the biggest single area, while life sciences will get £1.5bn, advanced manufacturing £1.4bn, clean energy £1.2bn and quantum computing £1bn.

Increases were “between 50 per cent and 100 per cent” for the priority areas, Chapman said, with the biggest proportional increase going to the creative industries, which will get £369mn as ministers aim to boost areas such as film, television, advertising, music and video games.

Chapman said the video games sector was a “big, significant global market” where the UK was “home to a number of extremely successful” companies. “There is a lot of underpinning high tech in that, and so innovation and research can really drive you to higher quality products,” he said. “We’re going to go after that.”

On AI, he acknowledged it would be “mental” for Britain to try to compete with global giants such as Nvidia and that it “doesn’t make sense” to enter crowded areas such as large language models. “That is being done at a much larger scale than we could ever invest in in the private sector already,” he said. “Whereas we can absolutely compete on the next-generation technology where there is not a crowded space.”

He said this could include “next-generation transformers and algorithms” aiming at lower energy consumption, saying he wanted to go into areas where it was less crowded and “potentially higher risk, but more transformative if it all comes off”.

Fewer projects are likely to get awards, but those that do are set to be bigger. “I don’t want to give crumbs to everybody. I want to give a meal to some people,” said Chapman.

While some question the government’s ability to pick the most promising technologies, Chapman argued that part of the role of public funding was to back projects that might fail. “We should have a higher risk tolerance for things not working,” he said, arguing that even failed projects might produce knowledge that was useful elsewhere.

He argued that taxpayer funding could entice private investors to launch projects in the UK rather than elsewhere, saying that for more commercial projects he would expect private funding to more than match government investment.

Science organisations have welcomed the government’s commitment to research, but say that higher education funding squeezes are harming its ambitions, alongside other issues such as visa restrictions.

Chapman defended prioritising areas that produce growth. Fostering innovative companies in Britain “means there is more money in the system, more taxes being paid, which allows us to put more money in at the top end and fill the hopper” for pure research, he said.

Additional reporting by Michael Peel