Minister scolds laggardly financiers
September 29, 2006
Minister scolds laggardly financiers. Check it out:(The Herald Via Thomson Dialog NewsEdge) SCOTTISH financiers came under fire from the man in charge of official efforts to improve Scotland's anaemic growth rate for allegedly not doing their bit to boost the economy.
Nicol Stephen, minister for enterprise, said private sector funders were hampering the drive to improve the number of successful start-ups by starving companies of the kind of risk capital that could make a vital difference to early-stage ventures.
He used an address to the globalscot conference of successful Scots to reopen the debate about the adequacy of private support for Scotland's hopefuls.
Small business lobbyists have complained about an "equity gap" affecting small firms that slipped beneath the radar of venture capitalists, which they say are focusing on big deals.
Some specialists in areas like technology say they have plenty of money to invest in small fry with the potential to achieve rapid growth but can not find enough good firms to back.
However, noting that the Scottish Executive had committed public sector funds to leverage in private sector money through the Scottish Coinvestment Fund, Stephen said: "Lots of people will tell you there's a shortage of good ideas and good management teams; I disagree with that.
"Some of our companies struggle to achieve that initial venture capital investment."
Highlighting the fact that on some measures investment by Scottish businesses in research and development that may be essential to improving productivity lagged well beyond more successful areas, he pointed the finger again. "In Scotland it tends to be . . . that R&D is often an area you want to be able to put a red line through. That is very dangerous and shortsighted and ultimately damaging for the economy."
The criticisms got short shrift from the venture capital industry. "As an industry we invest in every sector of the economy across all regions. In 2005, in Scotland we invested GBP114m in 96 companies, " said the British Venture Capital Association. "We are always looking to make a good investment. If the opportunity is there we will take it."
Copyright 2006 Newsquest Media Group Source: Financial Times Information Limited - Europe Intelligence Wire.
Related Tags: venture capital, capital, Scotland, scotland, scottish, sector
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