Technology companies received 28 per cent of the private and venture capital investments for all European industries last year, a new survey indicated today, but compared with US competitors Europe's IT sector remained starved.
That is because 74 per cent of private and venture capital US industrial investment went to technology companies last year, said the Money for Growth survey published by Pricewaterhousecoopers.
More than twice as much money was invested in US technology start-ups than those in Europe - $10.50 billion (£6.52 billion) in 1998, compared with £2.58 billion, the consultancy told PC Week.
Of Europe's total technology investment, 44 per cent was channelled to UK companies. British technology start-ups received £1.14 billion, which was more than the next five countries together: Germany, France, the Netherlands, Belgium and Norway.
Most of this capital comes to Europe from US investors. The consultancy estimated that almost two-thirds of UK investment came from the other side of the Atlantic.
In the US, institutional investors such as pension funds consider technology start-ups to be good investments, which results in the high IT investment figures, Marco Rochat, European leader for the consultancy's Global Technology Industry Group, told PC Week.
European technology companies are hindered, however, by fragmentation of the European market. "Technology companies are concentrated in four or five centres" in the US, Rochat said, but "in Europe there are 15 or more."
Rochat said Europe's technology companies were also hindered by the proliferation of stock markets.
European IT companies were broken into 10 subdivisions by the survey: communications, £793 million invested in 1998; software, £658 million; hardware, £79 million; semiconductors, £64 million; Internet, £57 million; other electronics, £270 million; biotech, £221 million; medical, £354 million; and pharmaceuticals, £82 million.
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