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Small and medium-sized businesses "bear the brunt" of innovation in the UKs technology sector, according to the National Endowment for Science, Technology and the Arts (Nesta).
New business start-ups within the technology sector are risky because there are some products which are new and for which there is no existing demand, meaning demand has to be created.
Also academics may have good ideas, but they probably wont have the skills necessary to develop those ideas themselves because they are not commercial.
The most difficult area, according to Nesta, is life sciences and particularly pharmaceuticals because it is the most expensive area and has the longest lead time to market because of the regulatory environment.
Last month, the government announced that it would provide £100 million of funds through the Technology Strategy Board for research into sectors such as green energy and communications.
The BBC reports that the board has provided over £1 billion of funding for over 700 projects since it was set up in 2004.
Anthea Harrison, investment director at Nesta, said: "I feel that some companies – with the exception of pharmaceuticals because part of their business cycle is to develop new drugs – are more interested in product enhancement.
"[They] probably are not interested in spending their hard-earned income on alternatives. So one feels intuitively that small companies bear the brunt of innovation."
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