Start Up Funding and Innovation

Today, I attended an event run by the TGLP on the Digital Economy in the Thames Gateway – probably the most interesting items I heard were from Will Hutton during a question and answer session – and yet again, the issue of funding came up. It has certainly been mentioned in the press recently, with banks strongly resisting any efforts to meet lending targets for businesses. While I didn’t completely agree with some other points he made such as student loans (I did four degrees using student loans but see it as an investment rather than a major burden), he was bang on with this. He wrote an article covering this issue last week. In many respects I have no problem with the concept of things like bonuses, but they need to exist within a system that is transparent and that rewards performance, neither of which are features on the existing system. Loans to businesses (and start ups and SMEs) are another matter entirely; they are critical for job creation and stimulating economic growth. Every now and then, I have considered looking at debt as a means of expanding the business, and the banks have been horrendous in almost every respect (they are all happy to help out with factoring because our clients include both public sector organisations and FTSE companies). Elizabeth Varley (from TechHub) again highlighted a few points – it was quite funny seeing a few local government councillors madly scribble down some points when she mentioned issues around council tax for SMEs!

One great thing that has happened since I last wrote about this issue is the launch of some competitions for funding feasibility studies by the Technology Strategy Board (TSB) in technology-inspired innovation and digital services; we will be submitting a number of proposals once we finalise who we will be collaborating with. This is just the kind of thing that is of great value in helping the start-up community develop ideas and indeed it is something that will help foster innovation. While no scheme is perfect (you need to submit your applications in Word for example), it is streets ahead of anything else in the UK!

A very interesting point (which brings the two themes of this blog post together) is around the issue of digital inclusion. At the TSB briefing days, there was a lot of great discussion around opportunities for the government to deliver services digitally (which has massive cost-savings implications), and there is some very exciting stuff going on. However, it is important to realise that broadband penetration rates in the UK are still pretty low, although you may not realise it which may have a massive impact on the ability to deliver these services successfully and thus get the potential savings. Terry Price from Novas Scarman highlighted some pretty crazy statistics where there are areas in the UK where broadband penetration is below 30% of all households! Thus, I guess in our quest for a more connected, digital world, we need to be careful about not disenfranchising a significant portion of the constituency.