Competitiveness White Paper: Product Development: Credits for small firms' innovations

SMALL companies will be given up to pounds 1,000 in 'innovation credits', as one of the measures to improve Britain's record on inventiveness.

The White Paper says that despite some areas of success, such as pharmaceuticals, United Kingdom companies have failed to keep up with the competition in product development.

While the share of US patents registered by British companies has stayed at 4 per cent since the 1960s, the Japanese share has gone from 2 to 19 per cent, while Germany's has risen from 5 per cent to 8 per cent. Similarly, while the proportion of gross domestic product spent on industrial research and development expenditure has stayed at about 1.4 per cent for the past 20 years, it has risen in most other countries and is now 2 per cent in Japan.

The Department of Trade and Industry is using its new Business Links - 'one-stop shops' designed to make government services more accessible - to increase its support. There are 20 Business Links now, and they should cover the country by the end of next year.

Innovation credits will be available through Business Links. They can be used to help pay for services such as patent searches or consultancy, and will be available from another creation, the innovation and technology counsellor. Counsellors, who will have a technical and industrial background, are being installed in the first 20 Business Links, and will spread if the experiment is successful.

Michael Heseltine, President of the Board of Trade, pioneered the use of private sector secondees with his export promoters at the DTI.

In line with Mr Heseltine's belief that the DTI should be used to spread knowledge and expertise, it is setting up two innovation networks - Nearnet and Supernet - aimed at smaller businesses.