Technology tax breaks could create 250,000 jobs, says Intellect

UK technology companies have called for tax breaks and economic incentives to encourage the growth of the industry and create 250,000 jobs over the next...

UK technology companies have called for tax breaks and economic incentives to encourage the growth of the industry and create 250,000 jobs over the next ten years.

They say the technology sector could become the main driver of the UK economy as manufacturing continues to tail off and banking falters in the wake of the 2009 recession.

Intellect, the UK trade association for IT companies, says in its manifesto, "Britain has the environment to build tomorrow's world-leading technology businesses today. If we fail to capitalise on this, we deserve no sympathy for losing out on future growth."

The manifesto identifies six areas to focus on to capitalise on the sector's potential. These are entrepreneurship, academic connection with industry, a consistent framework for growth and prosperity, and delivery of the digital infrastructure.

Intellect wants corporate tax breaks for technology companies set up in designated "technology clusters", to try to emulate the kind of innovation seen in California's Silicon Valley.

It says one short-term answer is for the government to encourage the expansion of UK technology companies by reviewing how it awards its own IT contracts, which were worth a total of £16bn in 2009.

Action is needed on the low number of entry-level IT jobs in the UK, the trade association says. It says many IT services and outsourcing companies take on thousands of graduates, but few of them are in the UK despite these companies generating a large portion of revenue in this country.

"We believe that companies providing such services in the UK, but which are headquartered externally, should be encouraged to bear their fair share of entry-level recruitment in the UK," said a spokesperson for Intellect.

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