Government to invest £375m in tech and innovation

The government has announced the launch of a new £375 million scheme to drive investment in the UK’s most high growth, innovative, and R&D intensive firms.

The Future Fund will see the government co-invest with private investors to help scale-up innovations across UK industries including clean technology and life sciences.

Chancellor Rishi Sunak will hold a landmark Treasury Connect conference in London later this year to bring together chief executives of the UK’s biggest tech firms and investors.

Under the scheme, the government will commit £375 million of funding to fast-growing firms looking to raise at least £30 million of investment.

To be eligible, businesses must have commitments of 70 per cent of an investment round from private investors with a track record of financing innovative companies - such as venture capitalists.

The scheme will span across several industries including life sciences, quantum computing and clean technology and aims to accelerate the deployment of breakthrough innovations that could solve some of society’s greatest challenges – from developing life-saving new medicines to technologies that support the UK’s transition to net zero.

“Our Future Fund: Breakthrough scheme will enable innovative businesses in every corner of the UK to access the finance they need to scale up and bring their transformational technologies to market - all while creating high-skilled jobs and boosting the economy as part of our Plan for Jobs,” said Rishi Sunak, chancellor of the exchequer. “Technology and innovation will be at the heart of our future economy which is why we are investing billions in R&D to help cement our status as a world-leader in this field.”

Sunak added: “Above all, our investment will incentivise collaboration between our most ambitious entrepreneurs and private investors, helping to commercialise breakthrough products such as new medicines and green technologies that could change our lives for the better – all while creating high-skilled jobs that help boost the UK economy.”

The government said that due to high research and development costs, breakthrough technology companies typically require more capital over longer time periods than other companies to bring their products to market.

It claimed that the UK’s most innovative companies are key drivers of future growth and said it is estimated that 1 per cent growth in these firms could grow the UK economy by £38 billion.

In March 2020, the government introduced the Future Fund which helped support the high-growth sector during the pandemic. This scheme provided more than £1 billion of convertible loans to 1,190 businesses.

“The support we have provided over the past year is not only helping firms to survive the pandemic, but also driving the growth and jobs of the future, making the UK a global innovation powerhouse,” said business secretary Kwasi Kwarteng.“The original Future Fund was a tremendous success in helping cutting-edge firms to get the fuel in the engine they need to really motor forwards, and we are building on that with the fresh Future Fund: Breakthrough scheme.”

The government is supporting innovative companies through the Plan for Growth, which includes the Future Fund: Breakthrough, the forthcoming Innovation Strategy and £14.9 billion of spending on research and development.

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