There are very interesting links for ensuring that the SBIR process links up with this broader procurement process. Large businesses and prime contractors have requirements for small business sub-contracting plans. These are monitored every year, and you can find the numbers if you dig around in the internet or annual reports. So the large firms tend to have small business officers, some have SBIR officers whose job it is to identify small technology companies funded by SBIR programmes. The DOD runs showcase events to try and bring small companies and big firms together.

Some preliminary estimates indicate that small firms in the US are getting an order of magnitude more State funding than their counterparts in the UK. It might as much as ten times. It's really significant.

As I said at the beginning, there's this gap in the middle of the technology development process. People are forever talking in the UK about the equity gap. I don't think there's an equity gap at all. I think it's a funding gap. This gap is filled to some extent by private sector contracts, but the key gap in public sector support is in public sector contracts (see Figure 3--Government innovation contracts).

I said earlier, and I'll reinforce it, the reason this is important is that basically universities can only go so far. You actually need a business vehicle to do this stuff, especially soft companies, but venture capital won't fund that. If you encourage venture capital to fund this stage, which I'm afraid is what our government has done to an extent, all you will do is ensure that they don't make adequate returns to attract further investment. So this is why we have been campaigning for a SBIR type scheme in the UK.

[FIGURE 3 OMITTED]

DAVID CONNELL

Senior Research Associate, Centre for Business Research, University of Cambridge, Cambridge UK

(1) Lord Sainsbury (2007) The race to the top: A review of Government's science and innovation policies, London, October.

(2) 'I would argue they were able to build a business of this kind in a way which was executed so well--and chip companies are all about execution in my view--because the group of people had worked together within Cambridge Consultants, this soft company, doing a whole range of different contracts, for different customers, for about 10 years. So they honed their skills, they built a technical team, and they built a management team. A lot of the work was in CMOS wireless technology for companies like Ericsson, so they were virtually there when the Bluetooth standard emerged and they were in a position to put their foot on the gas'.

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