UK and Scottish Government support for high-tech firms is misconceived and could be frustrating economic growth, according to a new study.
St Andrews, Glasgow and Stirling university researchers found a mismatch between the “true nature” of Britain’s high-growth firms and policies developed to support them.
Their study concludes Westminster and Holyrood governments have over-subsidised technology firms, many of which are incapable of growing, while missing the target on businesses with genuine high-growth potential.
Research on Increasing the Vital 6% Designing Public Policy to Support High Growth Firms, is published this week by the National Endowment for Science, Technology and the Arts. It calls for a “major” overhaul of state support for firms with high-growth potential.
Report author Ross Brown said the current system of research and development grants and co-investment initiatives was “largely ineffective”.
“Our research clearly shows that there is a mismatch between the nature of high-growth firms and the policies which have been developed to support them,” said the St Andrews academic.
“The vast majority of high-growth firms are in fact well-established firms from traditional business sectors and do not equate with the hypothetical ‘techie’ view of these firms,” he said.
“The UK has some fabulous growth-oriented firms, but in the main these tend to be in consumer-oriented or service industries not R&D intensive sectors like life sciences,” Dr Brown added.
“This is particularly the case for regions such as Northern Ireland and Scotland which have less well developed high-tech sectors than the south of England.”