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Split views on funding UK innovation

Ian Grant

The UK government should support research into plastic semiconductors, regenerative medicine based on stem cells and low-carbon energy production as a way of supporting economic development, according to a government adviser.

Hermann Hauser, co-founder of Acorn Computers and later Amadeus Capital Partners, a venture capital firm, will recommend that government spend £300m to set up research centres to study these fields and help partner companies commercialise the ideas that emerge, reported the Financial Times.

Hauser is preparing the report for business secretary Peter Mandelson later this month. Mandelson is driving the Digital Britain initiative to shift the productive basis of the economy from finance and services to the production and exploitation of intellectual property.

Hauser said Inmos, the government-backed semiconductor maker, may have failed when the government pulled out its funding, but the staff had gone on to form some 30 other microelectronics companies in the Bristol area.

The government invested £65m in Inmos, and the companies formed following its demise had employed around 1,000 staff and attracted £1.3bn in venture and other capital, the FT said.

This was a template that could be reproduced elsewhere, said Hauser.

But David Connell and Jocelyn Probert of Cambridge University's Centre for Business Research reject this view. In a report for the UK Innovation Council published in January, they say the three big "myths of UK innovation policy" are that university research is the key source of technology and innovation, that venture capital is the primary source of funding for tech start-ups, and that co-funding collaborative research is the best way to support technology development.

"As a result of relying on these false assumption, UK innovation policies are poorly aligned with the needs of many of the entrepreneurs and SMES best able to build the high technology economy the UK needs," they said.

They recommended that government beef up the Small Business Research Initiative with £75m in direct funding and €800m diverted from collaborative European R&D programmes.


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