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New proposals to help businesses grow…but there’s a catch

Posted: 25th May 2016   In: Corporate Commercial

The government has announced a range of proposals to encourage innovation and to help businesses grow, but the changes could also see firms facing more competition from former employees.

One of the proposals aims to prevent red tape from stifling entrepreneurship. This would involve removing or reducing the effectiveness of non-compete clauses in employment contracts. These are clauses that can be used to prevent an employee who leaves a company from working for a rival or setting up in competition for a set period, typically about six months.

A government statement says: “The clauses are only enforceable in a court of law if they protect a legitimate interest and are reasonable. However, there have been suggestions that they can hinder start-ups from hiring the best and brightest talent, so the government is asking for views from individuals and employers on whether this type of practice is acting as a barrier to innovation and employment.”

The government is also seeking views on how it can encourage more innovation. It’s conducting a survey asking about the following key areas:

Marking regulation work for business

How can the government make sure that regulation doesn’t stifle businesses and instead drives innovation?

Access to data

How we can continue to be a world leader in open government and transparency?

Access to finance

What difficulties do businesses encounter in seeking finance for innovation and how can the government help unlock these?

Using government procurement to kick start development of new tech

With the public sector spending around £240 billion a year – equivalent to around 14% of GDP – there is huge potential to invest in businesses offering new and innovative services. How do we make sure that government procurement practices reflect this?

Supporting new and dynamic businesses

Challenger businesses pursuing new technologies and business models are already embracing innovation. How can we make sure they aren’t stifled by red tape and regulation?

Maximising opportunities to deliver infrastructure that unlocks wider economic opportunities

We already have a network of Catapult Centres across the UK developing new technologies and working on taking these ideas to market. Government funding for these allows ventures that would not be able to be funded through business alone to be developed. The government wants to know how we can build on this to make it more widespread across the country.

Intellectual Property (IP)

The IPO’s 2016 IP Awareness Survey showed that 96% of firms had not valued their intellectual property assets and that only 20% had generated additional income by trading those assets. Ministers want to hear views from business on measures that would help ensure the benefits of British research, invention and creativity are felt strongly within our economy and fuel the development of future innovation.

Business Secretary Sajid Javid said: “I want to see more enterprising start-ups and greater productivity in a free and fair marketplace, by making sure we take action to break down any barriers that are curbing innovation and entrepreneurship.”

Please contact Sarah Liddiard if you would like more information about regulatory or employment issues.

Posted by: Sarah Liddiard
Corporate Commercial
Luton Office