Business Secretary Vince Cable urged the government to double the Technology Strategy Board’s (TSB) funding in a speech last night.
At the Mission-Orientated Finance for Innovation event in Westminster, Cable asked the government to double the TSB’s funding from £500m to £1bn.
The TSB’s current budget is around 0.03% of GDP and Cable argued that increasing funding will allow the Catapult network to expand and remove some of the “crippling barriers” to private funding.
The TSB has seven catapult centres in the UK from future cities and the connected digital economy, through to transport systems and cell therapy, and it is intending to expand the network up to nine later this year.
A Catapult is a physical centre where UK businesses, scientists and engineers work side by side on late-stage research and development. The space allows ideas to be transformed into new products and services to generate economic growth.
Cable said that extra TSB investment could enable the Catapults to leverage great private funding, because the model requires public funding to be matched by the private sector. For example, a further £500m of public investment could mean at least a £1bn more of innovation spending every year across the UK, according to Cable.
“This would close some of the gap on our competitors, moving us closer towards that important figure of 2.9% of GDP spend as being the indicative level necessary for the UK’s future economic success,” said Cable.
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“Moreover, the partnerships we are building between the public and private sectors via initiatives like the Catapults will mean that additional funding will be spent where it is definitely needed, not where government thinks it is."
Cable emphasised how important science and innovation is to economic growth and long-term economic development.
“Of the productivity growth that took place in the UK between 2000 and 2008, one-third (32%) was attributable to changes in technology resulting from science and innovation. Innovative firms are also more resilient and more likely to export and there is a serious export challenge facing the UK."
Cable said if the UK invests less in science and innovation compared to competitors, it will be sustain the UK as a world leader.
But public and private investment into R&D has been static in the UK, at around 1.8% of GDP since early 1990s. Meanwhile the US spends around 2.8% of GDP per annum, while Korea spends 4.0% of GDP and China, France and Germany are all increasing R&D budgets.
David Willbe, director of one of the UK’s top 20 law firms DWF, said: “The UK’s environment for tech and biotech businesses is improving, and the type of investment that Dr Cable is suggesting would help to push it to the next level.
“As well as increasing the funds and other assistance available from public programmes, some resource could be applied in publicising and demystifying them to the businesses in the tech and biotech sectors so as to ensure as broad a take-up as possible."