The former Jersey Innovation Fund, which loaned £2.1 million of taxpayers’ money to businesses, was shut down in 2017 after one of the beneficiaries, computer software firm Logfiller, went into liquidation owing the government £400,000 plus large sums of interest.
The fund’s demise was politically damaging for a number of individuals including then Assistant Chief Minister Philip Ozouf, who faced calls to ‘be removed or resign’.
But Mr Moretta said he believed now was the time for an improved version of the JIF to be established and that some of the £20 million remaining in the fiscal stimulus fund could be used.
He added that he felt there had been an over-reaction to the performance of the last fund and made a number of suggestions on how a revised version could work better.
He said: ‘The problem with the innovation fund wasn’t the idea itself but the execution of it. People said it was a failure but really there was only one failure out of the investments that were made.
‘It would be great to do a re-evaluation of it now to see how much out of what was spent eventually came back.’ He added: ‘Lessons could be taken from the previous innovation fund and there a number of things you could do to improve it.
‘First of all, the government should take equity in the investments, not just loans. That way they could benefit from the upside of any success stories to compensate from any downsides that there are, and you are always going to get some failures. Loans and grants could still also form part of the mix.
‘Matched funding should be looked at so that when an investment was made, the government would only put in funds if an equal amount was put in by a private investor.
‘Often private investors make investments not just for the financial side of things but also because they have expertise or contacts to help a business develop. If the government partners with people like that, it would reduce the risk of the investment.
‘The government should also use professional investment managers to make the investment decisions. They do that with the strategic reserve and the Social Security fund, so why not do it with this?’
Mr Moretta said that the lack of a mechanism for government financial support for start-ups in Jersey was currently a weak spot in the offering to attract and build digital business in the Island.
‘At the moment Jersey can offer super-fast broadband and a good quality of life, while the pipeline of skills and business ideas coming through here has never been better.
‘But there are still boxes we are not ticking when it comes to attracting people to our digital sector. One of these is government incentives or investment. If you look everywhere else in the world they have schemes like this and we need something similar to complete our proposition,’ he said.
