Government efforts to support high-tech businesses are simply an exercise in "re-varnishing the policy deckchairs" rather than the "effective" policy-making needed to ensure the economy remains competitive, a Cambridge University study has argued.
Coinciding with the Prime Minister's visit to California, home of Silicon Valley, the study calls for the Government to "urgently" adopt the US' $2bn-a-year small business innovation research programme that channels funding to early stage technology companies.
The Government has already made two stabs at setting up a British version, called the Small Business Research Initiative, after noting that its first attempt in 2001 had not been a success.
Since last March, Chancellor Gordon Brown has made it compulsory for Whitehall departments to spend at least 2.5pc of their research and development budgets with small firms. The latest figures show they are all exceeding the minimum spend. Also contracts are now advertised on the supply2gov website.
But David Connell, senior research associate at The Centre for Business Research, University of Cambridge, argued the targets are too low.
"Despite government efforts, we still do not have effective policies in the UK to ensure that public sector procurement plays its full role in the innovation economy we need to build to remain competitive," he said.
The Government's current aim is for industry and government research and development expenditure to rise from 1.9pc of GDP to 2.6pc by 2014, but Mr Connell said other countries including the US, Japan, Germany and Sweden already exceed that level.
The former venture capitalist, who still sits on the board of Cambridge-based TTP Ventures, argued that a crucial weakness is that few policy-makers had any practical experience of industrial research and development, or technology commercialisation.
"Merely re-varnishing the policy deckchairs will not achieve the transformation everyone wants," he added.
Tony Blair toured Cisco Systems' head office in San Jose on Sunday and met chief executives from Hewlett-Packard, Apple and Google. He said he was in "listening mode" and asked them for advice on how best Britain could boost its IT.
