Invest in emerging technologies, says innovation promotor
1 min read
The UK stands to lose £44billion in annual revenue unless it invests in the growth sectors that will turn the UK's economic fortunes around, according to a report published by innovation promotor NESTA, the National Endowment for Science, Technology and the Arts.
In a move to promote start ups, NESTA is calling for a £1 billion high tech start up fund to be established, with money focused at companies addressing emerging technology sectors.
Jonathan Kestenbaum, NESTA's ceo, pictured, said: "One dangerous aspect of the current crisis is the collapse of equity finance for early stage growth business. These firms will be the heartbeat of our recovery."
The report, called Attacking the Recession, urges the Government to use the Budget as an opportunity to reshape the economy by investing in high growth sectors, such as healthcare, green technology and digital media.
In a three pronged approach to tackling the recession, the report calls for:
* Government to direct a third of its financial stimulus package towards these growth industries, including the use of preferential loans and easier borrowing terms;
* Urgent action to halt the decline in funding for early stage high growth businesses; and
* Regions to end their attachment to the 'London model' of financial services and property development.
Kestenbaum noted: "Previous industrial interventions in the 1960s and 1970s ignored demand and focused on unsuccessful attempts to pick winning firms, rather than new growth areas. The Government must invest in areas where future demand will drive next generation technologies."
Jon Moulton, founder of venture capital fund Alchemy, added: "It will incentivise entrepreneurs to go and find solutions to the challenges we know are coming our way. Doing so will create new jobs and will also bring much needed private sector investment back to the table."
