Tuesday, 25 November 2014
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Bright candidates for government finance

As previously reported in this column there’s a widely held view within both Westminster and industry that the most effective assistance government can give the technology sector is regulatory rather than financial.

But while simply picking winners and throwing money at it might not always be the most helpful approach, the notion that industry will always step in when government stands back is a dangerous misconception.

Established sectors might not struggle to impress industry with their credentials, but emerging technologies - many of which could be key for the UK - can fare less well when responsibility for their growth and survival is placed in the hands of risk-averse investors.

In our latest interview, David Clarke, chief executive of the Energy Technologies Institute, makes a strong case for direct government investment in low-carbon energy: a rapidly growing sector that has had mixed fortunes in drumming up funding.

“Industry will often not invest until the government puts its money where its mouth is”

Clarke’s role is to help to the UK meet its CO2 reduction targets and one of the big stumbling blocks to achieving this, he tells us, is the risk-averse nature of industry backers. Government pledges and assurances that it’s serious about a sector are, Clarke argues, not always enough. Industry often won’t invest unless government demonstrates it’s serious by putting its money where its mouth is.

It’s a view that’s borne out by recent events in the offshore wind sector, where Siemens’ decision to invest in a new offshore wind turbine plant in Hull very nearly didn’t happen when it looked like the government was going to cut its promised ports investment. There are many other examples - not all as high profile as renewable energy - of sectors that would benefit from similar statements of government intent.

Take the subject of our big story: Light Reading. It’s common for proponents of new technology to make bold claims for the potential of their invention. Indeed, if The Engineer had a pound for every press release containing the word ’revolutionary’ its commercial team could pack up and go home. But Visible Light Communications (VLC), which uses the rapid flickering of state-of-the-art LEDs to encode and send data, might just deserve this most over-used of epithets.

Already achieving data-transfer rates of 500Mb/sec, VLC is one of those areas where potential applications are limited only by the imagination, a pretty good start for a nascent technology.

But while the UK has some expertise, its efforts pale alongside the serious money being thrown at the technology in China and Japan. If the UK wants to steal a march on these emerging areas, and we accept that sometimes government has to stimulate investment with investment, then VLC should probably be a prime candidate.


Readers' comments (4)

  • It's a question of a long-term view. Practically anything that can be made in Britain, if reasonably transportable, can now be made cheaper in China. But Chinese labour costs will rise, and in perhaps 10 years time the manufacturing cost differential will be less. For instance, if we can just get the right public funds to Renewables as Dr Clarke says (and newborn renewables need capital grants - ROCs alone will not do it), then we can bridge over the gap until our production cost is more competitive. But the time the support is needed is NOW.

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  • Alas, our Government seems to be pen pushing, penny counters who look at budgets first. How often have they bought equipment from abraod because it is "cheaper". How blinkered can they be when for every penny they spend on wages, they get 20% of it back in tax. Corporate taxes adds to the country's coiffers, and local economies get a boost.
    The companies involved are able to spend more on R&D etc. so more innovations can be made in the future etc. Or am I just Naive?

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  • SOPM* is always fun. Everybody has a set of genius ideas for spending money .... if they don't have to spend their own. Of course, Government will ferret out new ways to spend money that the private sector has missed..... that's their job heh heh * Spend Other People's Money

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  • China can afford to throw money at renewables as they have a surplus of cash. The UK is hideously in debt. For the UK to throw money at technology that will not give any returns on investment is making our debts worse. Their only way out is to spend other peoples money and create a few renewables jobs costing a million pounds each.
    A reduction in taxes is a better investment to encourage real industry.

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