The government has been castigated by a group of MPs over its failure to develop a coherent strategy to support the commercialisation of technology innovations by UK start-ups.
The Science and Technology Committee's (STC) latest report praises the work undertaken by the UK's Technology Strategy Board, it criticised the lack of support given to entrepreneurs.
The committee argued the government lacked a coherent innovation policy and mechanisms to turn academic excellence into thriving businesses, effectively forcing start-ups into the arms of private equity investors.
“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,” said Andrew Miller, chairman of the STC.
Too often, UK start-ups are acquired before they have a chance to flourish into larger businesses that would produce substantial jobs and wealth in the UK, the committee argued.
Last autumn, chancellor George Osborne promised to establish a UK business development bank, set to open this year, with the intention of providing better access to funding for small businesses.
“The new business development bank could help in this area and the government should seek to develop the market in technology equities and ensure the market has access to information that may change the perception of the relative risk of these equities,” said Miller.
Larger businesses also have a vital role in promoting an environment in which start ups can flourish, added Ben Dowd, a business director at mobile operator O2.
“For too long, businesses in the UK have worked in silos and it’s damaging our ability as a nation to innovate. Big businesses need to take responsibility and work more closely with small businesses to help them fulfil their potential and kick-start economic growth.”
The STC's highly critical report comes just a day after the launch of London's Catapult centre. The government has touted Catapult centres as a core plank of its strategy to assist the development of UK start-ups.
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