One of Britain’s most promising high-tech businesses is threatening to locate its first commercial plant in Japan or Singapore if it fails to win financial aid from the government.
Nanoco, a Manchester-based nanotechnology company, said its difficulties in raising funds in the UK contrasted with what was available in other countries, adding the “lack of practical help” for companies was at odds with government proposals to “re-balance” the economy towards production industries. The warning that the company might move manufacturing operations overseas raises the prospect of the UK losing a strong position in emerging materials technology.
In the past few decades the UK has gained an early lead in areas of science and engineering, such as monoclonal antibodies or tilting trains, only to find that the main commercial applications of these technologies are developed abroad.
Nanoco’s travails over funding are linked to the demise of the system of regional development authorities, which had relatively large sums of money to spend on trying to boost local economies.
RDAs were scrapped by the coalition government just over a year ago, partly as a deficit-cutting measure. Nanoco, which employs 60, is one of a handful of companies worldwide making quantum dots – fluorescent semiconductor nanoparticles that promise applications in fields such as consumer electronics and solar energy.
“Ministers talk a good game [about trying to encourage manufacturing] but when you look at the support packages that are available they are often unsuitable or too thinly spread,” said Michael Edelman, Nanoco’s chief executive.
He said procedures for applying for money under the government’s £1.4bn regional growth fund – a package of measures the coalition has put in place for supporting businesses – were “over-bureaucratic” while the criteria for winning money from the fund were not geared to companies such as Nanoco.
The plant planned by the company would cost £10m and employ just 30 more people – almost all of them highly skilled engineers and scientists.
Despite the small size of the planned investment, any decision to build the plant outside north-west England would represent an “enormous blow” to the local economy, according to Tim Newns, deputy chief executive of Midas, a development agency owned by a group of local authorities and covering Greater Manchester.
Alan Welby, director of knowledge economy at the Mersey Partnership, a group of local authorities centred on Liverpool, said Nanoco’s expertise in “advanced manufacturing” was one of the types of business that his authority wanted to develop in the region.
Nanoco is making small quantities of its particles – which sell for $2m a kilo – for electronics companies in Asia, which incorporate them in flat-screen televisions, which use less energy and offer sharper pictures.
The company currently operates a small plant in Runcorn that can turn out 25kg of quantum dots a year. Its planned facility would have a capacity eight times higher.
The Department of Business Innovation and Skills said it was unable to discuss Nanoco’s individual case.
However, it said “supporting economic growth” was the government’s “central task” and it was also keen to strengthen the UK’s manufacturing sector.