Still no news from Government on £750 million innovation fund
In April’s Budget the Chancellor announced a £750 million fund for innovation to "stimulate growth in the UK's industries of the future". Some two months on we’re still not closer to any details about what the fund will cover or who can apply for it.
The fund was designed to provide financial support for both emerging technologies and regionally important sectors, yet those very companies who should be benefiting are not hearing anything from the Government.
Julian Frost, Head of TMT (Technology, Media & Telecoms), at BDO Stoy Hayward says: “Like most sectors of the economy, TMT businesses have been hit by the downturn in the global economy, however, over the next three years nearly a third anticipate growth levels of more than 20% - showing that they amongst the fastest growing and most optimistic businesses in the UK.”
“In order to ensure that these businesses can continue to grow at such rates, investment in innovation remains a key priority. This investment in TMT will be funded from not only traditional sources such as private investors and banks, but also from Government funds including an allocation from the £750 million fund for innovation outlined in the Budget."
As M&A activity has all but dried up in the current environment, innovation and significant investment in R&D continues to be the strongest route to achieving growth.
“In the current environment, companies are finding that in order to get the best ‘bang for their buck’ it’s cheaper to go offshore to develop innovative solutions,” points out Frost.
“However, because of the obvious cost savings of offshoring Research and Development spend, the UK is propping up overseas creative and innovation industries to the detriment of our own. It is therefore vital that the details of how this fund will be distributed are announced as soon as possible,” concludes Frost.
Posted June 30, 2009
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