EDITORIAL - Money to be had in them thar valleys

It looks as if there is money out there for investment in the UK IT industry - it's just that you have to look hard to find it. The announcement this week that Glasgow-based telecoms exchange carrier Atlantic Telecom is raising #110 million is good news for those looking for investment in Scotland. For as much as the investment flow can go both ways - with job losses just as likely as job creations - the fact that money can be found is encouraging for those looking for a cash inflow to their businesses.

And it's time for an apology - two weeks ago, I claimed that Compaq had cut 5,000 jobs in Scotland when it was actually 500. Apologies. That same week, IBM announced the introduction of hundreds of jobs at its Greenock plant where it has introduced a European helpdesk.

It seems that the west of Scotland is pressing home its advantage in language skills to good effect and ignoring the anti-English sentiment of the rest of the country.

But the mystery of why the UK is still not pressing its technology towards the winning post still remains. And this is not just an English, Scottish or Welsh disease but a pan-European contagion. We seem to be happy to glide along making modest profits and do not appear to have the killer instinct to take over the number one positions. However, we find time to criticise those who do.

The contrast is particularly acute when you examine the e-commerce market.

In the US, start-up internet providers, content providers and virtual publishers sprung up early in the Goldrush years between 1994 and 1996.

You may say that people prepared to rush into throwing their money at start-up companies pedalling a virtual concept are lunatics. Maybe they are, but they are also the lunatics who paved the way for the whole edifice of e-commerce that many of us will utilise during the next few years.

The question is one of risk. Are you prepared to take it or not? Our culture is one of low risk. But to make the move you have to confront the fear of failure. There is nothing wrong with failing - as long as you don't take your house down with you. Professor Tom Cannon, chief executive of Management Charter Initiative, is quoted in this week's European as saying that investment houses in Europe are more interested in supporting management buy-outs and buy-ins and doing 'a few' property-related deals.

Despite many European universities having bolted on commercial departments to exploit their intellectual property rights, few have made money and none have helped to instill an entrepreneurial spirit into their research staff.

In reality, the amount of venture capital directed at high-technology industries is minute. Of the total investment in Europe of $10.4 billion, approximately 6.5 per cent went to start-up companies. Silicon Valley managed to attract $821 million in the first quarter of 1998 alone.

But if Atlantic Telecom can attract funding of #110 million, there is obviously money out there to be had. Maybe there is a secret to be learned from them - or maybe they just have more determination than the rest of us.