Business accounts for two-thirds of the UK's total research and development (R&D), according to official figures.
New numbers from the Office for National Statistics (ONS) show that business undertook 66% of the nation's R&D projects in 2003, compared to 21.4% carried out by institutions of higher education.
The government carried out 5.9% of the work.
R&D is creative work that attempts to increase the knowledge base within a given area of expertise.
In total, the UK spent £20.8 billion on R&D in 2003, equivalent to 1.86% of the gross domestic product (GDP). That figure is up over 2002 when £19.8 billion was spent.
The average of European Union member states is 1.93% of GDP, while the US spends £176.4 billion, or 2.6% of its GDP.
Manufacturers overwhelmingly attracted more funds for R&D in 2003 than other sectors. Some 77% of business' spending was in the manufacturing sector, compared to 21% in the service industry.
Regionally, the South East led the way, drawing in £3.5 billion. The North East came in at the bottom, collecting just £281 million in 2003.
The report also showed that nearly a third of all government spending on R&D was related to defence projects. At 32%, the number was down from 37% in 1995.
