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UK high-tech firms 'under threat' New start-up investor considered
(about 2 hours later)
Government funding is needed as the credit crunch threatens a generation of small high-tech companies, a business investment group has warned. The government is considering setting up a new bank to invest in start-up and high risk business ventures.
The National Endowment for Science, Technology and the Arts said the UK could lose its global standing in areas such as healthcare and biotechnology. Prime Minister Gordon Brown said he would look at the case for setting up such a bank, targeting hi-tech firms.
There was a 70% fall in new venture capital funding last year, it said. He said the proposed bank would "provide the finance for more difficult and more risky start-ups for high-technology businesses of the future".
The warning came as the government announced plans for targeted ways of helping the hi-tech industry. Earlier a business investment group warned that many young high-tech companies were under threat.
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 National Endowment for Science, Technology and the Arts (Nesta) said government funding was needed as the credit crunch threatened a generation of small high-tech companies.
It said that there was a 70% fall in new venture capital funding last year and warned that the UK could lose its global standing in areas such as healthcare and biotechnology.
Nesta called on the government to go half-and-half with the private sector to provide £1bn for high-tech investment.
'Industrial renewal'
Prime Minister Gordon Brown said he would be examining the case for setting up "a bank for industry and innovation".
He made the announcement while launching a report called New Industry New Jobs, which said that government needed to recognise the impact that decisions on taxation and spending have on the development of British businesses.
"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."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.
The government has decided that decisions on the funding of academic research will take greater account of its economic impact. The government has said that decisions on the funding of academic research will take greater account of its economic impact.
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 consequencesSerious 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'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 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 report concluded."The cost to the NHS and to society in terms of poorer health outcomes would be considerably larger," the report concluded.
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 for firms 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.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.
The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & ConditionsThe BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & Conditions