The government will provide £750m in funding for emerging technologies in the manufacturing, digital and biotechnology sectors, chancellor Alastair Darling said in his 2009 budget report on Wednesday.
According to Darling, the Strategic Investment Fund will "encourage exports, support inward investment, promote research and development, and harness commercially our world-class science base".
The Confederation of British Industry (CBI) told ZDNet UK on Wednesday that the Strategic Investment Fund was likely to be used more for venture-capital purposes than research, as the money had been allocated to the Department for Business, Enterprise and Regulatory Reform (BERR) rather than the Department for Innovation, Universities and Skills (DIUS).
"That the money was allocated to BERR sends a strong message that it will go to the commercialisation end: the investment and venture-capital end of business," said Tim Bradshaw, head of enterprise and innovation at the CBI.
Bradshaw said that, of the £750m, only £50m had been allocated to the Technology Strategy Board (TSB), an organisation dedicated to promoting technological innovation across the UK. The CBI, in its pre-budget recommendations to the Treasury, had suggested 10 times that amount, Bradshaw said.
"The CBI called for a larger slug of money for the TSB," said Bradshaw. "Fifty-million pounds is only a tenth of what we asked for."
Earlier this week the government announced it would continue to support the work of the Technology Strategy Board, set up in 2004 as a forum between business, government and other technology stakeholders.
UK IT technology trade body Intellect cautiously welcomed Darling's budget announcements.
"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," said Intellect director general John Higgins in a statement. "I welcome the ambition to make this the technology budget."
Higgins said that Intellect welcomed the new Strategic Investment Fund, and said budget action on trade credit insurance will help local electronics and electrical retailers. However, proposals to provide venture-capital funding were still "areas of blank canvas", said Higgins.
The government has also committed to funding greener manufacturing technologies in the 2009 budget.
"Through £405m of new funding, we will... encourage low carbon energy and advanced green manufacturing in Britain, to drive the application of new technology and invest in small-scale projects," said Darling.
The chancellor dubbed the government spending and taxation plan "the world's first ever carbon budget", and pledged to reduce Britain's carbon emissions by 34 percent, from 1990 levels, by 2020.
The government will supply £435m of funding for energy-efficiency measures for businesses, homes and public buildings. These measures include funding for improvements to heating and insulation.
Offshore wind-energy provision will get a £525m injection of financial support over the next two years. This will be funded through the Renewables Obligation, a government initiative that requires licensed electricity suppliers to source a specific and annually increasing percentage of the electricity they supply from renewable sources.
Technologies such as carbon capture and storage, which reduce carbon emissions produced by burning coal, oil and gas, will also receive a funding boost. A new funding mechanism will be used to finance at least two, and up to four, demonstration projects of these technologies, said Darling.