How government plans to augment economic growth through innovation

Written by Kunal Sawhney, CEO Kalkine Group

With the nation recovering from the Covid-steered jittery following the planned exit roadmap and ever-expanding scale of vaccination drive, the government of the United Kingdom has been deliberately empowering the innovative and state-of-the-art enterprises which are highly likely to bolster the economic growth in the near term.

The recent surge in the number of technological advancements across the globe has significantly helped the organisations, as well as the governments, to improve the offerings in a more sustainable manner.

With an intention to support R&D and innovation intensive enterprises, the HM Treasury has introduced a new scheme that will be responsible for driving the investment into the high growth technology-driven firms. The programme of strengthening the companies will effectively help in catalysing the post-pandemic recovery as the businesses will be better equipped to provide worthwhile solutions.

The government has directed a fund to the tune of £375 million for the technology-intensive companies to deliver game-changing technologies to market. The scheme, £375 million Future Fund, opened for applications from 20 July. The firms focused on R&D processes with well-established operations in the UK will be preferred under the scheme announced earlier this year during the Budget 2021.

In a deliberate attempt to bring consequential changes in the technological landscape, the government has already committed more than £1.3 billion to the expanding portfolio of over 500 innovative enterprises.

The government of the UK has remained dedicated to supporting the innovation that can potentially channelise the growth in upcoming years as the country seeks a plethora of advancements while it progresses ahead with an objective of achieving net zero. In order to achieve breakthroughs in various technological aspects, the government has spiralled the spending on R&D to nearly £14.9 billion in 2021 to 2022, the highest level was seen in the last four decades.

The Downing Street administration is aiming to increase the net public and private investment into R&D and innovation-driven projects to 2.4% of the gross domestic product (GDP) by 2021. To effectively scale-up the innovations across the UK industries, the authorities have orchestrated a co-investing plan under which the government will set out definitive monetary resources to cushion the private investment supporting the innovative projects.

Industries including clean technology and life sciences are likely to become more equipped with the funding than ever before so that the corporations can work uniformly without worrying about finance, productively creating more employment opportunities and driving economic growth.

To encourage the industry leaders, the Chancellor of the Exchequer Rishi Sunak will convene a Treasury Connect technology conference in East London in September this year. The conference will bring together the senior leaders, industry veterans and CEOs of the biggest tech firms, alongside the investors associated with the biggest technology corporations of the UK.

The tech firms looking forward to raising at least £30 million in investments will be entitled to receive funding under the Future Fund: Breakthrough scheme. Other than this, all the businesses should have a commitment of 70% investment from a private investor, venture capitalists or a group of individual investors having a successful track record of financing innovative corporations.

Innovation being the key to all the technology-driven advancements, the innovative and R&D focused enterprises will become the primary drivers of the future economic growth in the UK. According to the preliminary estimates by HM Treasury, a 1% growth in these firms could functionally grow the UK economy by as much as £38 billion.

About Lisa Baker, Editor 2423 Articles
Lisa Baker is the Editor of Always Finance, and writes about Business, Finance Technology and Healthcare. Lisa is also the owner of Need to See IT Publishing.