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Government funding for businesses is "very integral" to the promotion of innovation in the technology sector and for the development of new products and ideas, industry experts say.
According to the National Endowment for Science, Technology and the Arts (Nesta), the biggest sources of financial support come from the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs).
Of about £8 billion that has gone into new business start-ups, about £5 billion has come from the EIS, making it the single largest source of funding.
The VCT market is not as buoyant as it has been, mostly because the tax rules have changed, which means that VCTs have not raised as much money.
Nesta said that the EIC and VCTs are both very complicated for company directors and heavily regulated, not only in how tax relief is obtained but in the criteria for companies to qualify.
Another source of government funding is from research grants such as the new Enterprise Capital Funds, where the government puts money into the market as opposed to actively giving people tax breaks.
Anthea Harrison, investment director at Nesta, said: "If you look at all areas of the developed world, government funding is an essential part of producing innovation and all governments have schemes where they fund grants."
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