Business secretary Vince Cable has called for the government to double the Technology Strategy Board’s (TSB) funding from £500 million to £1 billion.
During a speech to the Mazzucato conference, in London, yesterday, Cable said that the extra funding would confirm that the government has a “serious commitment to innovation”.
He said: “The annual Technology Strategy Board budget is approximately 0.03% of GDP, or £500 million. Doubling annual innovation spend could bring its resources closer to £1 billion. It would enable the Catapult network to be deepened and widened and lift some of the crippling barriers to private funding.”
The board’s funding was increased from £185 million to £500 million during a government-wide spending review last summer.
The TSB currently oversees seven ‘Catapult’ centres across the UK covering a number of sectors including the digital economy and future cities. The centres focus on translating seven ‘high potential’ areas of innovation into new products and services to stimulate growth.
Cable said that an increased budget for the TSB would “enable the Catapults to leverage in greater private funding.
He added: "The Catapult model requires public funding to be matched by the private sector one for one, which means substantial bang for every buck of extra public funding.”
The business secretary emphasised the importance of science and innovation to economic growth.
He said: “Of the productivity growth that took place in the UK between 2000 and 2008, one third (32 percent) was attributable to changes in technology resulting from science and innovation.”
However Cable warned that the UK’s leading position in the ‘knowledge-based’ economy will be in jeopardy if it consistently invests less in its science and innovation capabilities than its competitors.
He said: “The UK’s total investment in R&D [research and development] – both public and private – has been relatively static at around 1.8 percent of GDP since the early 1990s and stood at 1.7 percent of GDP in 2012, the last year for which we have data.”
By way of contrast, the US spends 2.8 percent of its GDP on R&D each year, China spends 1.8 percent, South Korea spends 4 percent and France and Germany invest over 2 percent each.
The TSB plans to spend £42 million supporting entrepreneurs developing digital technologies this year.
Last month the board paid for seven start-ups developing robotics to go on a trip to California to pitch their products to peers, partners, investors and potential customers.