Former Minister for UK Trade & Investment and head of the CBI, Lord Digby Jones of Birmingham, will warn that UK companies are missing out on millions of pounds of EU cash designed to help small and medium sized companies.
Lord Jones will give the warning at a conference organised by one of Europe’s leading research and development companies, Pera. He will say that more needs to be done to support Britain’s small and medium-sized enterprises (SMEs) as the small business sector is key to economic recovery.
"This country is only going to get itself out of this economic malaise if we trade our way out of it. If you ever analyse the first year out of a recession, it’s always the small business sector that pulls the country out; it is the sector that starts to employ first, the sector that grows wealth again first. The small business sector is key to economic recovery. "We need to trade our way into economic success by making innovative, branded, quality, value-added goods and selling them around the world, but the way in which SMEs can be helped to win funds to maximise their commercial and financial value must be simplified and made both easier and cheaper.
"To do this, we’ve got to have a government that walks the path with business and doesn’t ignore the value of small companies." And he will say that since the start of the recession money spent on research and development by businesses has reduced by over a quarter to just £25 billion in 2009 and that much of this was due to small businesses cutting back. "The UK spends 1.79% of GDP on R&D. This is behind the OECD average – behind Belgium! The UK R&D tax-credit system works well but much more must be done with small, innovative businesses receiving special fiscal help."
He will tell the audience of business leaders and company directors that Europe recognises the value of SMEs, which was why it has a 1.4 billion euro fund to help small companies innovate and develop new products and processes. The fund for SMEs is part of the Commission’s Seventh Framework Programme for Research and Development (FP7), which is designed to drive growth, innovation and collaboration across Europe. Lord Jones will praise the work of Pera and the hundreds of SMEs they are working with for driving the development of new products, markets and customers using FP7, but will say that with greater awareness, more firms can win funding.
"Companies are missing out on millions of pounds of FP7 funding and therefore investing less in R&D", he will warn. "UK firms spent less on research and development than either Germany or France. In 2007 before the banking crisis, Germany spent ?62billion, France ?39billion and Britain just ?37billion." And he will call on the Coalition Government to do more to support small firms saying, "If they and the EU were to do one thing to help SMEs it should be to cut regulation and the paperwork and make doing business easier.
"SMEs make up a large part of the economy, representing 99 per cent of all enterprises in Europe. In the EU, SMEs employ 75 million people in the private sector and are an essential source of growth and innovation. It is vital that the Government and banks do more to unlock the potential through research and technological innovation and this means cut red tape and offering support where need." He will conclude by saying: "The Government is rightly focused on deficit reduction but has so far failed to do enough to encourage growth."
The conference has been organised by Pera, Europe’s most successful business support organisation, which has successfully help develop over 600 new products over the last five years, with an estimated market value in excess of £20 billion.
Pera will highlight how successful innovation and product development can lead to companies adding millions of pounds to their turnover. And it will show how by constructing the right team of experts it is possible to maximise business and commercial value and minimise financial and technical risk.
Its work covers almost every sector from traditional manufacturing to food processing and medical products. Recent successes include Fornax a project to create healthier Cornish pasties, Clean-Ex which is helping to reduce the CO2 footprint of the oil, gas, power and chemical industries, Isotrack, a new tracking system for containers, and FireRob, an unmanned fire fighting vehicle that can efficiently tackle blazes in the most hazardous environments, particularly where it is dangerous to send fire-fighters.