The government’s budget to be unveiled by chancellor Alistair Darling on Wednesday is expected to contain millions of pounds of investment for green developments and new technologies.
A government source told Reuters that green measures are expected to be given £500m.
This coincides with a statement made by business secretary Lord Mandelson at Loughborough Innovation Centre, where he argued the government needs to offer targeted support to unlock new potential in existing and new technologies.
"To succeed in this high-tech, low carbon economy of the future, to drive growth and to secure more high-value jobs in the UK, we need to act,” he said. “It's not about picking winners or ignoring market signals but removing barriers that hold business back.”
A report called New Industry, New Jobs by the department for Business, Enterprise and Regulatory Reform (BERR), released on Monday, further highlights the benefits new technologies can bring to the economy due to their disruptive potential.
“New technologies will drive both consumer and business demand,” said the report. “They will also transform existing products, and are likely to force businesses right across the supply chain to develop new business models and adopt new, innovative ways of delivering services."
The report also highlights the government’s role in driving forward a low carbon transformation.
“We are addressing not just an environmental imperative but a huge business opportunity as demand expands for low carbon goods and services and for greater energy and resource efficiency,” noted the report.
Meanwhile, a report called Attacking the Recession by the National Endowment for Science, Technology and the Arts (Nesta) has warned the UK economy risks losing £44bn a year unless the budget gives new technologies more funding.
“The government needs to stimulate the economy in areas where the combined effect of long-term consumer trends and government action will be high, such as in green economy, health care and digital media,” the Nesta report suggested.
Nesta also called on the government to set up a £1bn fund to finance high-tech companies in order to re-energise the venture capital market.
The UK venture capital market is currently suffering significant losses, according to the latest figures released by the British Venture Capital Association. In 2008, investment decreased below £20bn for the first time since 2005 and the number of companies receiving backing fell from 1,680 in 2007 to 1,571 last year.
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