£150 million ventured, shot-in-the-arm for UK biotech gained? - June 30, 2009
The UK government announced £150 million of investment for small technology firms by way of a venture capital initiative on 29 June, to general approval from venture capitalists, and particularly the biotech industry, who had been lobbying for support.
The newly-created UK Innovation Investment Fund will invest in a collection of other venture capital funds thereby ultimately boosting investment in start-ups and spin-outs - in life sciences, clean technology, digital sciences and advanced manufacturing, according to prime minister Gordon Brown. A private-sector fund manager will choose where the money goes, and first funds are due by the end of the year.
"We need the Google or Genentech of the future and they will only be created if there is the capital to back them," said science minister Paul Drayson (Wall Street Journal).
The government reckons it can attract enough private-sector and pension fund investment to build up a £1 billion fund ten years from now. “It’s a long way short of the hoped-for £1 billion fund to be available now, in 2009, and not in 2019,” criticizes The Independent’s enterprise editor Richard Tyler, whose critical commentary is headlined: “UK innovation fund fails to get my light sabre sizzling”. He adds that enterprise funds set up earlier in the year, and in 2008, have so far yet to announce any actual investments.
The Wall Street Journal notes that in February US venture capital bloggers rejected the notion of the federal government handing over money to venture capital firms to bail out start-ups. That, however, may be because Thomas Friedman's Op-Ed column in the New York Times, which started the bloggage, suggested a more direct mechanism for handing out the cash, involving the government choosing VC firms (and therefore potentially distorting the market).
£100 million of the cash comes from the business department (BIS), much of it allotted from a £750 strategic investment fund trailed in April’s budget. The rest comes from the health and energy/climate change departments (DH, DECC).
Comments
PPP i.e. Public-Private Partnership is a key solution for funding problem.Certainly steps taken by UK Govt need to revitalise biotech to be appreciated.But these govt funding need to be monitored carefuly with a socialist outlook.
Posted by: Anurag chaurasia | July 23, 2009 11:05 AM