Outlook: Venture capital for start-ups

PROMOTING investment in high-technology start-ups is one of those motherhood and apple pie issues for Governments. Nobody can object to the ambition, and although some might carp about the principle of public intervention in an activity best left to the market, the amount of taxpayers' money at stake is usually too small to get worked up about.

Britain's poor start-up record and correspondingly underdeveloped venture capital market has been exercising the Chancellor, Gordon Brown, ever since he got into Government. He's hardly the first to recognise it as a core weakness in the UK economy. Public concern dates back as far as the Macmillan Commission on the financing of industry in 1932. So it seems unlikely that anything the Chancellor comes up with in a promised package of measures today will of itself do much to correct the problem. The British disease, it seems, is not so much a lack of funds as a lack of entrepreneurial spirit. If the huge array of potentially profitable businesses was there, clamouring for finance, chances are the finance would be there too.

As it is, there must be some doubt as to whether Britain can mimic America's success in developing a thriving high-technology start-up sector. The bottom line is not how much start-up finance is available, but what the Government can do to boost entrepreneurship. Other than keep a steady hand on the macro economic tiller, the answer is probably only a little.

That doesn't matter necessarily; every little helps. The Chancellor sensibly intends to stake little public money on financing small high-tech companies, but will do all he can to exhort and encourage scientists and entrepreneurs. Nobody can object too much to better tax incentives for individuals who do take the plunge and start a business.