The outlook for the UK economy remains flat and innovative SMEs continue to face a squeeze on funding. The BioIndustry Association (BIA) today publishes a new report detailing a scheme to enable the British public to support the innovative businesses that will drive the nation’s future economic growth.
In the report, Citizens’ Innovation Funds – Engaging the public with UK innovation, new figures estimate that £300 million of investment could be unlocked a year from the scheme creating over 1500 new jobs in the knowledge economy.
The introduction of Citizens’ Innovation Funds (CIFs) which are a tax advantaged investment scheme would unleash the patriotic potential of the general public by offering an opportunity to invest in innovative UK companies. The CIF concept is based on the Fonds Communs de Placements dans l’Innovation (FCPI), a hugely successful French scheme which has raised over €6 billion since 1997 and invested in more than 1,000 innovative companies.
In the detailed report the BIA outlines the convincing case for the introduction of such a scheme in the UK.
- CIFs would give the British public the opportunity to engage with UK innovation and the future growth of the knowledge-based UK economy.
- CIFs would enable innovative companies to grow faster, employ more people and pay tax sooner than otherwise possible.
- £300 million a year of new investment could be raised through a scheme that it is estimated can be revenue-neutral for government within three years.
As a result over 1500 new jobs a year in innovative companies would be created.
Steve Bates, BIA Chief Executive Officer, said:
“Citizens’ Innovation Funds provide a practical way of unlocking the patriotic potential of a large number of Britons to crowdfund the innovative businesses which are essential for our nation’s economic future.
“In simple terms CIFs would allow members of the public to put up to £15, 000 a year into a fund for dragons’ den-style experts to invest in innovative companies – with a tax break if they keep their money invested for five years and tax free potential dividends.
“For companies access to such cash could prevent them from being sold at the earliest opportunity and allow them to maximise the potential for development and become a “British Google”, a “British Apple” or a “British Amgen”.
“At a time when new ideas are needed to boost the UK economy Citizens Innovation Funds are cost effective, practical and timely.”
Dr Melanie Lee, Chief Executive Officer at Syntaxin, a company that has received FCPI funding, said:
“The FCPI-related investment we have received has provided another source of cash to fund the research required to discover and develop new treatments for patients. For companies like Syntaxin, having a similar scheme in the UK would be a boost for innovation, and has the opportunity to bring the understanding of science closer to the general public.”
Iain Wilcock, Investment Advisor at Seventure Partners, a Venture Capital company that has run FCPI funds, said:
“Raising money through the FCPI scheme has enabled Seventure Partners to back promising companies such as Syntaxin and helps provide another source of capital to support innovation. The introduction of Citizens’ Innovation Funds could build on the successful French FCPI model that clearly shows the potential benefits of the scheme to the UK.”