THE GOVERNMENT is failing to support fast-growing technology firms, leaving startups facing a “valley of death” rather than opportunities like those in Silicon Valley, an influential group of MPs warns today.
In a strongly-worded report, the House of Commons science and technology committee says that despite government initiatives such as Tech City, which aims to foster technology startups in London, “the government does not have a coherent strategy to support the commercialisation of technological innovation”.
The report raises concerns that the current atmosphere encourages small businesses to sell out to overseas giants, instead of going it alone with the aim of become the next ARM Holdings or Autonomy.
It calls for changes in government policy to make it easier for fledgling firms to borrow funds. Proposals include using Vince Cable’s proposed bank for business to promote bonds for medium-sized firms, and freeing up pension and insurance fund regulation to encourage lending. The report claims that without doing more to encourage funding, the government is leaving startups facing a “valley of death” which prevents ideas from making it to market.
Labour MP Andrew Miller, who chairs the committee, said: “The UK’s university and science sector is a global success, but the challenge for government is how that world class academic research can be translated into commercial activity.
“I hope the government recognises that it needs to be more proactive if it wants to secure long term growth and competitiveness in the UK.”
The Department for Business, Innovation and Skills hit back over its record on encouraging fledgling companies, pointing to proposals such as relaxing listing requirements for fast-growing firms.
“The government has set out a clear approach for making the most of our world class science and research base,” a spokesperson said. “Despite enormous economic pressure we have protected the £4.6bn annual budget for science and research.”