How can the UK government support entrepreneurial innovation rather than large corporates?

Great timing for our cleantech discussion dinner last night with Lord Drayson’s launch of an electric vehicle trial, by the UK government (here) and the announcement of a $ 467 million loan to Tesla Motors both going to show how important innovation and sustainability are becoming to government agenda the world over.

The timing of these two announcements was interesting as it brought home the extraordinary differences in scale and approach between the US and UK. A $467 million loan NOW to a single entrepreneurial business, against a £25 million trial over next two and a half years (and looking like it will be going to large corporate players such as Mitsubishi and Nissan). Surely this sort of money is small change for these organisations?

The general mood of the assembled group of investors and entrepreneurial businesses was that funding was not the main issue facing cleantech companies today, rather the challenges are around scaling proven processes to industrial levels and finding ways to help slow moving industry incumbents to innovate. Without this, customers and revenue will be hard to come by. The government should be playing a major role here.

Entrepreneurial businesses with genuine innovations are in a difficult position. Large incumbent organisations, despite what they trumpet in their marketing campaigns are often scared or unable to innovate and find it hard to work with entrepreneurial businesses.

Whilst regulation and government support were seen as highly necessary to the widespread adoption of new technologies, most entrepreneurs were gloomy about the prospect of engaging meaningfully with the public sector as potential customers. This is a shame as the public sector could offer UK companies a significant boost by championing and purchasing some of the amazing innovation in the UK in the sector, some of which was on show last night.

I would be very interested in hearing views on how government support for emerging innovation might be structured to benefit the people and organisations that will bring about most significant change – entrepreneurial businesses. We have just been given an opportunity to help frame a discussion around this, more when we can go public but meanwhile:

If there was a national debate about supporting cleantech companies, how would investors and entrepreneurs shape the agenda to suit themselves?