Digital technologies will share in a 750 million pound (US$1.1 billion) pot to stimulate growth in the UK's "industries of the future", Chancellor Alistair Darling said in Wednesay's budget.
Announcing the Strategic Investment Fund, Darling said that communications, low carbon and advanced manufacturing technologies were "as important to the British economy as the financial services sector".
"This new fund will provide financial support, focusing on emerging technologies and regionally important sectors in, for example, advanced manufacturing, digital and biotechnology.
"It will encourage exports, support inward investment, promote research and development and harness commercially our world-class science base.
"In future, the sources of our growth will be more varied--and we need to ensure we play to our country's strengths," he said in a statement.
The fund will be split so 250 million pounds (US$364 million) is earmarked for low carbon investments; 50 million pounds (US$72.85million) for the Technology Strategy Board to support innovation and research in advanced manufacturing, low carbon tech and life sciences; and 10 million pounds (US$14.6) for U.K. Trade and Investment to help promote U.K. expertise at home and abroad.
Darling also announced a review of the powers and duties of Ofcom to ensure it can strike the right balance between delivering competition and promoting investment in communications infrastructure.
He confirmed approval for 'Digital Region', a 100 million pound (US$ 145.7 million) project led by Yorkshire Forward that will roll out next-generation broadband to South Yorkshire. And the budget committed the government towards the proposal in the Lord Carter's Digital Britain report to roll out a 2Mbps broadband service across the United Kingdom by 2012.
Another measure that will encourage investment in telecoms by business is the first-year capital allowance scheme. From this month, firms investing more than 50,000 pounds (US$72,850) in qualifying plant and machinery, including telecoms, in 2009-10 will benefit from a higher rate of tax relief on investment.
On e-skills the budget mentioned a 3 million (US$4.37 million) scheme to provide training for science teachers, a pilot programme to encourage science take-up in 20 local authorities and an additional £2m to be invested in providing support to encourage physics and maths take-up among post 16-year-olds.
John Higgins, director general at U.K. IT trade association Intellect, said in a statement: "I welcome the ambition to make this the technology budget. The Chancellor is right to try and paint a picture of how technology can provide the high-value jobs and economic growth of the future."
He praised the new investment fund, the money for science, technology, engineering and maths training and the first year capital allowance scheme.
But he criticized the government for failing to stump up the cash or support needed for the rollout of the next generation broadband network in the United Kingdom.
"Next generation broadband, the crucial new infrastructure demand of the 21st century so far, is given some necessary, but nowhere near sufficient, help," he said.
The budget also saw the government pledge to launch a review to consider whether and how to increase the supply of long-term growth capital to small and medium-sized businesses.
Higgins said this lack of definitive action would threaten small tech companies' survival, adding: "The case for a public private partnership on the 3i model is put out for review, at a time when high-tech start-ups, who could be the engines of future growth, risk perishing in the cold economic climate for lack of venture and risk capital. In both of these cases the time for reviews is all but over and the time for action is here."
Nick Heath of Silicon.com reported from London.
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