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Scottish Enterprise defends technology investment |
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Monday, 10 March 2008 |
A leading technology entrepreneur and business angel has accused Scottish Enterprise of wasting public money and distorting the market to the detriment of the private sector.
Brendan Hyland, who founded the optoelectronics company Kymata,
subsequently sold to Alcatel in 2001, criticised the agency’s
co-investment fund, which provides equity for start-ups, and its ITI
initiative, which aims to commercialise expertise in the digital media,
life sciences and energy sectors.
“The public sector is spoiling the market for early stage business
finance funds through the co-investment programme,” Hyland told a
conference hosted by Holyrood magazine. “And it is distorting the
market and competing with SMEs through the ITI initiative. The scale of
the wasted investment in this ill-considered initiative is appalling.”
Hyland, who assists and invests in early stage technology companies
with global ambitions, said that it was widely accepted that the public
sector did not represent an efficient means of allocating funds to the
private sector. He said that Scotland was even less efficient than the
rest of the UK, citing the comparative costs of financing technology
grants north and south of the border.
Scottish Enterprise chief executive Jack Perry said the grant mentioned by Hyland was
one of a number being transferred from the Scottish Government to the
agency and it intended to reduce the bureaucracy associated with them.
“In terms of distorting the market, there is no evidence on our
co-investment fund and other investing activities. In fact quite the
reverse; we have had extensive research done on this. The last thing on
earth we are doing with this is competing with the private sector.”
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Will Peakin |
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