by Mike Altendorf

Give us a break!

May 29, 20124 mins
IT Leadership

While the rest of the UK was up in arms about the granny tax and VAT on pasties, one particularly interesting piece of the budget announcement slipped by largely unnoticed.

Granted, computer games probably don’t command the same level of interest from our average Daily Mail reader, but the announcement that the government was extending the tax breaks it affords the film industry into the animation and gaming sectors was probably the only measure George Osborne introduced that actually took anybody by surprise.

At last, I thought, someone up there among the powers that be has understood the concept of investing in technical innovation.

However once I had the time to digest the news a little more my joy rapidly became frustration.

Why just the gaming and animation industries? What about technology innovation in other areas? The answer, of course, is obvious.

The average voter is going to appreciate the fact that Wallace and Gromit aren’t going to be emigrating any time soon, and they can cheer the fact that Downton Abbey doesn’t have to move its filming to a Bulgarian mansion.

Call me a cynic but name a politician who doesn’t have one eye on the opinion polls.

I find this very frustrating. I recently became a partner in an organisation called Capitalise.

We are a small group of investors who are focused on finding, investing and supporting the very best of the UK’s innovative new startups in the business-to-business technology space.

As regular readers might have noticed, this is something I am passionate about, not just because it’s an area that excites me but because I firmly believe that it’s here that we will find the engines of UK economic growth in the future.

It’s nothing new, we have always been great at inventing things but politicians need to realise that yearning for the good old days when we built things in factories is not going to turn the economy round.

We need to create a new manufacturing industry focused on software and technology and we need to support it with tax breaks and investment to ensure the next generation of technologists doesn’t feel it has to go elsewhere to find the support they need.

The technology industry already has a significant skills shortage (which in itself could be blamed on the lack of support for technology and software development at schools level) so the last thing we need is further brain drain.

I don’t want to be overly negative. There are signs that the need to support this industry is being taken seriously in some quarters.

The Technology Strategy Boardset up in 2008 runs some excellent events designed to bring business, government and academia together as a catalyst for innovation.

However, a lot of the work the board is doing is focused on healthcare and life sciences.

Laudable no doubt and certainly an area that needs focus but I would like to see the same level of focus and commitment in supporting the companies that have the potential to be the next Facebook, Google or Apple.

There are some useful mechanisms in place to give investors incentives to get involved such as the Seed Enterprise Investment Scheme, but these are about encouraging others to get involved rather than providing direct support for startups from the government.

Talking of Facebook, the company’s recent acquisition of Instagram (although not B2B I admit) is an amazing example of how in the US an idea can develop from a thought to being worth $1bn in the blink of an eye.

There is no reason why Instagram couldn’t have been British. Next time I hope it will be.

I don’t want to lay the blame for this solely at the feet of successive governments. Business itself has a role to play in supporting our startups.

In the last article I talked about how and where CIOs can find innovation and the fact that they need to go look for it outside of the usual places.

Aside from this being a critical part of the CIO’s role moving forward, it is also incredibly important for the economy.

CIOs can help by setting up apprenticeship schemes, investing in the youth of today, giving them technology skills that will help create a new type of high-tech manufacturing industry as well as providing opportunities for startups to show what they can do.

Not only are these the companies that could provide the technology that sets your company apart from the rest, but by supporting them you are supporting the UK economy and a strong economy is good for everyone.