TWO MONTHS ON FROM BUDGET & STILL NO UPDATE ON GOVERNMENT INNOVATION SCHEME

15.07.09 TWO MONTHS ON FROM BUDGET & STILL NO UPDATE ON GOVERNMENT INNOVATION SCHEME In April’s Budget the Chancellor announced a £750 million fund for innovation to "stimulate growth in the UK's industries of the future". Some 9 weeks on we’re still not closer to any details about what the fund will cover or who can apply for it, points out business and financial advisers BDO Stoy Hayward LLP. The fund was designed to provide financial support for both emerging technologies and regionally important sectors, yet those very companies who should be benefiting are not hearing anything from the Government. Paul Anthony, Head of TMT (Technology, Media & Telecoms), at BDO Stoy Hayward in Southampton says: “Like most sectors of the economy, TMT businesses have been hit by the downturn in the global economy, however, over the next three years nearly a third (30 per cent) anticipate growth levels of more than 20 per cent - showing that they amongst the fastest growing and most optimistic businesses in the UK.” “In order to ensure that these businesses can continue to grow at such rates, investment in innovation remains a key priority. This investment in TMT will be funded from not only traditional sources such as private investors and banks, but also from Government funds including an allocation from the £750 million fund for innovation outlined in the Budget. However, with the focus on Cabinet reshuffles and expense claims, will we ever get the answers that we’re after?” continues Anthony. As M&A activity has all but dried up in the current environment, innovation and significant investment in R&D continues to be the strongest route to achieving growth. “In the current environment, companies are finding that in order to get the best ‘bang for their buck’ it’s cheaper to go offshore to develop innovative solutions,” points out Anthony. “However, because of the obvious cost savings of offshoring Research and Development spend, the UK is propping up overseas creative and innovation industries to the detriment of our own. It is therefore vital that the details of how this fund will be distributed are concluded and announced as soon as possible,” concludes Anthony. ENDS For more information, please contact Dee Crooks at BDO Stoy Hayward on 020 7893 2761 / 07815 172 051 or email dee.crooks@bdo.co.uk Notes to editors: *This figure comes from BDO Stoy Hayward’s annual survey into the TMT (Technology, Media & Telecoms) sector. Respondents fall across all three sub-sectors and are senior finance executives in their organisation. Notes to editors: BDO Stoy Hayward LLP operates across the UK with over 3,000 partners and staff. BDO Stoy Hayward LLP is a UK limited liability partnership and the UK Member Firm of BDO International. BDO international is a world-wide network of public accounting firms, called BDO Member Firms. Each BDO Member Firm is an independent legal entity in its own country. The network is coordinated by BDO Global Coordination B.V., incorporated in The Netherlands, with its statutory seat in Eindhoven (trade register registration number 33205251) and with an office at Boulevard de la Woluwe 60, 1200 Brussels, Belgium, where the International Executive Office is located. In the UK the Belfast Firm is operated by a separate Partnership known as BDO Stoy Hayward - Belfast. BDO Stoy Hayward LLP and BDO Stoy Hayward - Belfast are both authorised and regulated by the Financial Services Authority to conduct investment business. BDO Stoy Hayward LLP and BDO Stoy Hayward - Belfast are both authorised and regulated by the Financial Services Authority to conduct investment business. BDO Stoy Hayward is an award winning firm. Recent achievements include: • Best Workplace UK - Financial Times 2008 • Audit Team of the Year – Accountancy Age Awards 2008 • Tax Team of the Year – Accountancy Age Awards 2008 • Corporate Finance Deal of the Year – Accountancy Age Awards 2008 • 100 Best Companies to Work For - The Sunday Times 2008 • The Women of Achievement Award – Women in the City 2008 • Business Superbrand - Business Superbrands 2008