An Innovation Bank should be launched to back new ideas and able entrepreneurs, Lord Kumar Bhattacharyya, head of Warwick Manufacturing Group, has urged.
And it must be a ‘one-stop shop’ capable of making a difference, he insisted.
Speaking in a House of Lords debate, Lord Bhattacharyya said: “Our problem isn’t that we don’t spend enough money – it is that we don’t use that money with a real purpose, with our objectives integrated across government for economic impact.
“So, for example, the £2.5 billion Automotive Assistance Fund announced by the Government last year was hard to access, lengthy to apply for and so did not integrate with what business urgently needed. We were draconian, while our competitors were fast on their feet.”
Not a penny was ever paid out.
He went on: “If we put together all the different sources of funding from applied science budgets across government we could create a £1 billion a year applied research fund, with no extra funding.
“We should integrate this with other funding streams like the Enterprise Capital Funds, the Higher Education Innovation Fund, Launch Aid and the regional venture capital funds.
“We need a change of culture – so I propose the creation of an arms length ‘Innovation Bank’ to develop technology and which would encourage entrepreneurs, researchers, business leaders and inward investors to create wealth in Britain.
“We need to have a single agency – and make the funding process simple and fast.”
It would be a one stop shop focussed on having real economic impact.
Lord Bhattacharyya added: “That means giving the ‘Innovation Bank’ leadership to people with business experience, setting them clear priorities, and offering the freedom to achieve the goals.
“Next, in an economy as regionalised as ours we need to give power to make big decisions at the local level. A couple of weeks ago, I wrote in The Birmingham Post about the importance of local leadership to economic growth. We need local and regional leaders with a real understanding of what is going on in the wider world.
“In China, they send their mayors to Singapore to learn about encouraging economic growth through technology. Here, we need to develop local leaders with the same vision, and give them the power to deliver national aims in a local way. So we need to both prioritise our funding and then regionalise the funding structure.
“That will create some real joined-up thinking that links our research base to our industrial competitiveness.
“Of course, this involves risks. But risk is part of enterprise. Risk is at the core of innovation. Not all businesses succeed. Many experiments fail. But we must offer people the chance to succeed, not throttle them with bureaucracy.
“There are many things government should not do. It should not get in the way.
“What it must do is create a framework of fiscal, regulatory, investment and research policies that encourage people to create wealth.”