UK ‘failing to reap rewards of world class research’

The House of Commons Science and Technology Committee identified a “valley of death” blocking the progress of scientific innovations from the laboratory to commercially successful businesses in the UK. The cross-party committee said it was “troubling” that so many British technology start-ups have to be acquired by foreign companies before they can grow into thriving businesses, meaning that much of the wealth and jobs they create go overseas.

Today’s report called on the Government to used the proposed bank for business to promote a bond market for medium-sized businesses, to provide capital which is often not forthcoming from finance markets focused on short-term returns.

Regulation to de-risk pension funds has inadvertently closed off a patient source of capital for firms that need time to develop technologies, the report found.

MPs also urged ministers to use the clout of Government procurement budgets to invest in small technology businesses, and called for a Treasury minister to be given specific responsibility for this process. The Government should set out a clear strategy for future funding plans, to give business confidence to invest in its own research and development in favoured sectors, said the report. And it called for consideration to be given to a requirement for investment funds to have a proportion of European small and medium-sized businesses in their portfolios.

Committee chairman Andrew Miller 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.”

He added: “British entrepreneurs are being badly let down by a lack of access to financial support and a system that often forces them to sell out to private equity investors or larger foreign companies to get ideas off the ground.”