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UK high-tech firms 'under threat' UK high-tech firms 'under threat'
(about 6 hours later)
Government funding is needed as the credit crunch threatens a generation of small high-tech companies, a business investment group warns. Government funding is needed as the credit crunch threatens a generation of small high-tech companies, a business investment group has warned.
The National Endowment for Science, Technology and the Arts says the UK could lose its global standing in areas like healthcare and biotechnology. The National Endowment for Science, Technology and the Arts said the UK could lose its global standing in areas such as healthcare and biotechnology.
There was a 70% fall in new venture capital funding last year, it says. There was a 70% fall in new venture capital funding last year, it said.
PM Gordon Brown and Business Secretary Lord Mandelson are to set out industrial investment policy later. The warning came as the government announced plans for targeted ways of helping the hi-tech industry.
The body, Nesta, says the government must step in and go half-and-half with the private sector to provide £1bn for high-tech investment. The government's report, called New Industry New Jobs, said government needed to recognise the impact that decisions on taxation and spending have on the development of British businesses.
The report identifies healthcare, green technology and digital media as sectors where the UK could lose its leading international status unless the government offers support. "This means making Britain's economic and industrial renewal the remit not just of the Department for Business, but of >all Government departments," the report said.
Nesta also urges Chancellor Alistair Darling to use the government's multi-billion fiscal stimulus package to support lending to companies working on new technologies. The government has decided that decisions on the funding of academic research will take greater account of its economic impact.
'Serious consequences' It has also decided to launch a series of reviews aimed at making sure that British businesses can take advantage of opportunities as they emerge from the recession.
Serious consequences
But there has been no indication that the government will go as far as the business investment group Nesta has asked and go half-and-half with the private sector to provide £1bn for high-tech investment.
Nesta's report identified healthcare, green technology and digital media as sectors where the UK could lose its leading international status unless the government offered support.
Nesta also urged Chancellor Alistair Darling to use the government's multi-billion fiscal stimulus package to support lending to companies working on new technologies.
It said: "The effects of not investing in these sectors are serious.It said: "The effects of not investing in these sectors are serious.
"If the innovative capacity of our healthcare sector weakens, over £8bn worth of pharmaceutical exports and over £1bn of domestic sales could be lost annually."If the innovative capacity of our healthcare sector weakens, over £8bn worth of pharmaceutical exports and over £1bn of domestic sales could be lost annually.
"The cost to the NHS and to society in terms of poorer health outcomes would be considerably larger. "The cost to the NHS and to society in terms of poorer health outcomes would be considerably larger," the report concluded.
"Failing to capture a share of the global market for clean technologies and environmental services similar to that which we enjoy in other important export markets, and falling behind with plans for renewable energy production, could lead to a loss of over £28bn in revenues.
"Failing to step up to the digital challenge in our creative economy could cost the UK economy over £6bn in value added per year by 2013."
Meanwhile, a minimum wage freeze has been called for by business leaders as part of measures to help private industry drive the economy out of recession.Meanwhile, a minimum wage freeze has been called for by business leaders as part of measures to help private industry drive the economy out of recession.
The British Chambers of Commerce wants more supportive measures in the forthcoming Budget, including cutting small businesses' corporation tax. The British Chambers of Commerce wants more supportive measures for firms in the forthcoming Budget, including cutting small businesses' corporation tax.
Do you agree with warning by The National Endowment for Science, Technology and the Arts? Do you work for a small high-tech company? Will government proposals make a difference? What would you like to see in Budget 2009? Send us your comments using the form below.
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