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NESTA: High-tech start-ups key to recession survival

Apr 20 2009

The government needs to focus on supporting new firms in next-generation industries in the economic downturn, says an innovation group.

According to the National Endowment for Science, Technology and the Arts (NESTA), failure to aggressively invest in sectors such as healthcare, green technology and digital media could lose Britain £44 billion a year in revenue.

The group calls for the upcoming Budget to include a £1 billion fund to support start-ups in the high-tech industries, as well as targeting one-third of its financial stimulus package towards these sectors.

Jonathan Kestenbaum, chief executive of NESTA, claims that industrial interventions in the 1960s and 1970s failed because the government attempted to bail out existing firms rather than help new growth areas and says this mistake should not be repeated.

Angel investor Jon Moulton, founder of venture capital fund Alchemy, adds: 'It will incentivise entrepreneurs to go and find solutions to the challenges we know are coming our way. Doing so will create new jobs and will also bring much needed private sector investment back to the table.'

Regional development agency One North East recently unveiled a £2.1 million investment to support entrepreneurs and high-tech small businesses in the region's software industry.

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