Where's all our innovation money?

The Government still hasn't said how it actually plans to spend its much-vaunted £750m innovation fund...

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Last Updated: 31 Aug 2010

Back in April, at the Budget, you may recall the Government proudly announcing the launch of a new £750m innovation fund, supposedly to ‘stimulate growth in the UK's industries of the future’. But it’s now two months later, and as accountancy BDO Stoy Hayward points out, we still have no idea what the fund’s going to do, or who’s going to be eligible to apply for it. So while the Government’s been wrestling with a raft of other problems (mostly of their own making), the UK tech sector has remained on tenterhooks. Perhaps the fund is so bleeding-edge that if you have to ask how to apply for it, you’re by definition not innovative enough…

BDO is keen to draw attention to the opportunity the Government is missing in the tech sector thanks to all this prevarication. Although tech firms have been suffering along with the rest of UK plc in the downturn, the accountancy found in a recent survey that almost one in three is expecting growth of more than 20% over the next three years. So they clearly haven’t lost their optimism. In fact, these figures suggest the sector has the potential to be one of the fastest-growing in the UK – and thus a good bet for investment from the Government (and the private sector, for that matter).

What’s more, it’s also true that since M&A in the sector has virtually ground to a halt in recent months, growth rates like these will only be achieved through innovation – swanky new products and services that appeal to the recovering market. And at the moment, when budgets are tight, lots of companies are trying to cut costs by moving their R&D offshore to cheaper climes – which might mean UK firms fail to benefit. So the need for some extra funding to keep R&D in the UK has never been greater.

Presumably the Government recognises all this, or it wouldn’t have set the fund up in the first place. But that makes it even stranger that two months after its launch, we still haven’t heard anything about how all this money is going to be put to work. Admittedly it’s had a few distractions lately, what with all these expenses and Cabinet reshuffle fiascos to resolve. But it’s hard to escape the conclusion that a few important long-term projects like this have been put on the backburner while the Government Where's all our innovation money?

The Government still hasn’t said how it actually plans to spend its much-vaunted £750m innovation fund…

Back in April, at the Budget, you may recall the Government proudly announcing the launch of a new £750m innovation fund, supposedly to ‘stimulate growth in the UK's industries of the future’. But it’s now two months later, and as accountancy BDO Stoy Hayward points out, we still have no idea what the fund’s going to do, or who’s going to be eligible to apply for it. So while the Government’s been wrestling with a raft of other problems (mostly of their own making), the UK tech sector has remained on tenterhooks. Perhaps the fund is so bleeding-edge that if you have to ask how to apply for it, you’re by definition not innovative enough…

BDO is keen to draw attention to the opportunity the Government is missing in the tech sector thanks to all this prevarication. Although tech firms have been suffering along with the rest of UK plc in the downturn, the accountancy found in a recent survey that almost one in three is expecting growth of more than 20% over the next three years. So they clearly haven’t lost their optimism. In fact, these figures suggest the sector has the potential to be one of the fastest-growing in the UK – and thus a good bet for investment from the Government (and the private sector, for that matter).

What’s more, it’s also true that since M&A in the sector has virtually ground to a halt in recent months, growth rates like these will only be achieved through innovation – swanky new products and services that appeal to the recovering market. And at the moment, when budgets are tight, lots of companies are trying to cut costs by moving their R&D offshore to cheaper climes – which might mean UK firms fail to benefit. So the need for some extra funding to keep R&D in the UK has never been greater.

Presumably the Government recognises all this, or it wouldn’t have set the fund up in the first place. But that makes it even stranger that two months after its launch, we still haven’t heard anything about how all this money is going to be put to work. Admittedly it’s had a few distractions lately, what with all these expenses and Cabinet reshuffle fiascos to resolve. But it’s hard to escape the conclusion that a few important long-term projects like this have been put on the backburner while the Government concentrates on saving its own skin...

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