shahsher
57394_144040609074673_240647610_o
A patriotic vision to lead the national effort.
The Secretary of State for Business, Innovation and Skills (Vince Cable): Creating a strong and balanced economy continues to be the Government’s priority. This means creating an environment in which entrepreneurs find it easy to start and grow a business, and pursuing demand management policies that stimulate growth and maintain financial stability.
There is also a role for an industrial strategy, which I shall set out in detail tomorrow. This means addressing the need for a long-term vision and having the courage to take decisions that bear fruit decades later, and focusing on the things we do best. There are two main themes, one of which is the need for long-term decision making. Many industries operate on that basis, including a company that I worked for, Shell, which thought in terms of decades. The other theme is the need for partnership between business and industry. Very few countries have a purely laissez-faire approach, and we should learn from their experience. We also should draw on our experience; I have learned much from some of my predecessors, particularly Lord Heseltine, who has an office in my Department and is contributing valuably to thinking on this subject.
We have identified several specific fronts on which Government action can have a real and early impact, including access to finance; partnership with specific sectors; support for emerging technologies; creating a pipeline of skilled workers; Government procurement; and the development of supply chains. In the short time available, let me say a little about each of them.
On access to finance, we are living in the aftermath of a disastrous banking collapse. Big firms, by and large, can raise short and long-term finance via capital and equity markets. The latest SME Finance Monitor, however, shows that in the last 12 months, 33% of businesses that applied for loans were rejected. The big banks, including the semi-state-owned banks, are preoccupied with repairing damaged balance sheets and there is a real shortage of long-term patient capital for business. We are tackling these issues by launching the funding for lending scheme, which reduces the cost of funding for banks that increase their lending; running schemes such as the enterprise capital funds and the enterprise finance guarantee to help early-stage businesses without a track record or collateral to access venture capital finance or bank finance; and stimulating the development of non-bank financial sources through the £1.2 billion business finance partnership. The big banks have launched the £2.5 billion business growth fund to provide equity. We are now actively looking at a proposal to establish a business bank that could work through alternative providers such as the new challenger banks and non-bank lenders to direct private capital towards growth and innovation and to corral our existing interventions, such as co-investment and guarantees.
Secondly, let me say a word on the sectoral approach. The second strand of the industrial strategy is to build on a collaborative strategic partnership with key sectors.
Of course, different industries require different degrees of business support and collaboration. At one end of the spectrum, much of the economy flourishes on its own. Here our efforts are best placed on making the UK a good place to do business, with attractive policies on taxation, regulation and free and efficient markets. At the other end of the spectrum, there are sectors that require a long-term, strategic partnership with Government; the Automotive Council and the aerospace leadership groups are good examples. Tomorrow, my Department will publish a new analysis of UK sectors, setting out those areas where support should be focused—in particular, advanced manufacturing; knowledge-intensive services, professional services and higher education; and industries that provide key inputs to our internationally traded activities, such as the digital economy and the energy supply chain.
Thirdly, on technology, one of the most powerful levers at our disposal is the potential of innovative technologies. Ground-breaking technologies are often too risky or resource-intensive for individual companies to nurture on their own, so the Government have an important role to play in accelerating the journey from academic research to commercial application. The Government Office for Science is in the process of updating its Foresight report on “Technology and Innovation Futures”, taking a fresh look at technologies with the potential to support sustained economic growth over the next 20 years or so. The report has identified a number of technologies that can have a material effect on future growth rates. The Technology Strategy Board is now concentrating on supporting the nascent disruptive technologies that have the potential to grow into new industries within a decade or more.
57394_144040609074673_240647610_o
A patriotic vision to lead the national effort.
The Secretary of State for Business, Innovation and Skills (Vince Cable): Creating a strong and balanced economy continues to be the Government’s priority. This means creating an environment in which entrepreneurs find it easy to start and grow a business, and pursuing demand management policies that stimulate growth and maintain financial stability.
There is also a role for an industrial strategy, which I shall set out in detail tomorrow. This means addressing the need for a long-term vision and having the courage to take decisions that bear fruit decades later, and focusing on the things we do best. There are two main themes, one of which is the need for long-term decision making. Many industries operate on that basis, including a company that I worked for, Shell, which thought in terms of decades. The other theme is the need for partnership between business and industry. Very few countries have a purely laissez-faire approach, and we should learn from their experience. We also should draw on our experience; I have learned much from some of my predecessors, particularly Lord Heseltine, who has an office in my Department and is contributing valuably to thinking on this subject.
We have identified several specific fronts on which Government action can have a real and early impact, including access to finance; partnership with specific sectors; support for emerging technologies; creating a pipeline of skilled workers; Government procurement; and the development of supply chains. In the short time available, let me say a little about each of them.
On access to finance, we are living in the aftermath of a disastrous banking collapse. Big firms, by and large, can raise short and long-term finance via capital and equity markets. The latest SME Finance Monitor, however, shows that in the last 12 months, 33% of businesses that applied for loans were rejected. The big banks, including the semi-state-owned banks, are preoccupied with repairing damaged balance sheets and there is a real shortage of long-term patient capital for business. We are tackling these issues by launching the funding for lending scheme, which reduces the cost of funding for banks that increase their lending; running schemes such as the enterprise capital funds and the enterprise finance guarantee to help early-stage businesses without a track record or collateral to access venture capital finance or bank finance; and stimulating the development of non-bank financial sources through the £1.2 billion business finance partnership. The big banks have launched the £2.5 billion business growth fund to provide equity. We are now actively looking at a proposal to establish a business bank that could work through alternative providers such as the new challenger banks and non-bank lenders to direct private capital towards growth and innovation and to corral our existing interventions, such as co-investment and guarantees.
Secondly, let me say a word on the sectoral approach. The second strand of the industrial strategy is to build on a collaborative strategic partnership with key sectors.
Of course, different industries require different degrees of business support and collaboration. At one end of the spectrum, much of the economy flourishes on its own. Here our efforts are best placed on making the UK a good place to do business, with attractive policies on taxation, regulation and free and efficient markets. At the other end of the spectrum, there are sectors that require a long-term, strategic partnership with Government; the Automotive Council and the aerospace leadership groups are good examples. Tomorrow, my Department will publish a new analysis of UK sectors, setting out those areas where support should be focused—in particular, advanced manufacturing; knowledge-intensive services, professional services and higher education; and industries that provide key inputs to our internationally traded activities, such as the digital economy and the energy supply chain.
Thirdly, on technology, one of the most powerful levers at our disposal is the potential of innovative technologies. Ground-breaking technologies are often too risky or resource-intensive for individual companies to nurture on their own, so the Government have an important role to play in accelerating the journey from academic research to commercial application. The Government Office for Science is in the process of updating its Foresight report on “Technology and Innovation Futures”, taking a fresh look at technologies with the potential to support sustained economic growth over the next 20 years or so. The report has identified a number of technologies that can have a material effect on future growth rates. The Technology Strategy Board is now concentrating on supporting the nascent disruptive technologies that have the potential to grow into new industries within a decade or more.