A quarter of British high-tech companies say lack of funding is the biggest obstacle to their growth, according to a survey by the Federation of the Electronics Industry. The survey found that a third of the 209 companies questioned this spring were heavily reliant on external funding with a further third, mainly small companies, reliant on banks. Many companies were unaware of alternative, cheaper, sources of investment or grants, said the Federation. This, and other findings such as 62% of companies’ belief that they weren’t making the most of their computer systems even though they felt that to do so would improve productivity, have prompted the Federation to start the FEI Industry Forum, which will offer information on all these aspects. There are plans to put much of the information up on the Internet, or make it available in other electronic forms, under an initiative called Industry on Line. The Forum has been partly funded by the UK Department of Trade & Industry and it will also offer self-assessment packages, another area companies felt to be important but either did not know how to go about it or didn’t have the time. The Federation stresses, however, that it is not an advice body but a source of information. It sees itself as developing into a strong trade association that can represent the interests of the UK electronic industry at government levels, both domestically and internationally. By the year 2,000 the electronics industry worldwide will be the largest global industry, accounting for 10% of all gross domestic production. For the UK, which has just slipped to fifth place in the largest national electronics industry league, the Federation says it wants to help British companies take their rightful place as a major world force. The Federation, which was formed about 18 months ago, embarked on the survey to discover the use of computer systems within this industry sector; factors likely to increase staff productivity; use of self-assessment and benchmarking; relationships along the supply chain; what a change in the government of the UK would mean; exports success; and funding. Deregulation of the global telecommunications industry was seen as a significant market that UK companies wanted to enter. Around a quarter did not export their products, citing repressive overseas regulations. And the single biggest factor those questioned felt hampered their business, but was totally out of their control, was fluctuating exchange rates.

European Monetary Union

Despite this finding, the Federation, in analysing the survey, failed to draw any conclusions about whether UK companies, therefore, thought European Monetary Union would be a good thing – an issue rather bigger than the benefit to small companies. One question the Federation says it should not have asked was whether the companies thought a change in the UK’s government would make a difference to their business. The Federation says this was a political question that was out of place in the survey and the result, which showed that 73% didn’t think it would help them, was a misinterpretation. Really, the companies felt a change in adminstration was irrelevant, said the Federation at the survey’s launch. However, the report of the survey, Do Or Die: The UK Technology Industry In The Year 2000, uses quotes from respondants such as a Labour government would substantially increase corporate taxes and Tories promote a better business atmosphere, which certainly suggest that British business does believe a change in government would be significant.