Yannis Pierrakis is Head of Investments Research at the National Endowment for Science Technology and the Arts (NESTA)
NESTA’s research shows that the 6 per cent of UK businesses with the highest growth rates generated half of the new jobs created by existing businesses between 2002 and 2008. Such young, innovative companies particularly need Venture Capital (VC) because they require significant capital up-front to develop new products in advance of sales. They tend to have intangible assets and ambitious growth plans that require large amounts of finance, show a significant delay before generating revenue and consequently entail high risk. As a result, debt finance is inappropriate – but venture capital is an alternative form of finance that is structured to address these challenges.
Creating new industries requires sustained investment over the long-term, continued commitment and long-term resources. The semiconductor and microcomputer industries are good examples of this lengthy and capital-intensive process. In both cases, it took up to ten years of continued risk capital investing before the industries properly took off. Virtually every other new industry since – biotechnology, personal computers, PC software, wireless communications, the Internet – have followed this pattern.

Science education put at risk by new Academies Act
CaSE Director Imran Khan has written a post for the New Scientist S-Word blog warning that the new Academies Act, which made it through parliament this week, has removed the obligation by new Academy schools to teach science and maths in line with the national curriculum. Under the previous government, Academy schools (publically-funded but independently-run schools) were required to teach science, maths, english and ICT, however this requirement has been removed by the new law.
As Imran points out, “More than 9 in 10 businesses employ people with skills in science, technology, engineering and maths, and two thirds of all employers report difficulty in recruiting enough of those workers. Leaving students without an understanding of these subjects doesn’t just deprive them of the enjoyment of science, but also seriously harms their career prospects – and the economy too”.