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By Joey Gardiner, 10 October 2000 15:15

NEWS E-minister Patricia Hewitt today unveiled the government's latest statistics on the state of business and IT in the UK, and launched the Internet Mentoring Initiative for firms that want to become ebusinesses. The specific initiatives announced by Hewitt include a regional internet incubator fund to give SMEs (small and medium-sized enterprises) help and support, and possibly access to venture capital raised by the UK government. Hewitt said although the latest figures on internet use by SMEs was encouraging, there was still more to do to get firms to use the web more and develop as ebusinesses. She told silicon.com: "The mentoring initiative is partly about helping dot-coms and start-ups, who have told us it's really hard for them to get the advice and help they need. It's also about helping traditional businesses become ebusinesses, and about entrepreneurs outside London and the south-east to get the conditions they need to start their businesses." The Internet Mentoring Initiative, consisting of a £1.1m web portal and an Internet Incubator Fund costing a further £3.7m, will go live in early 2001. The incubator will consider applications for help from businesses, with the first awards being given in spring 2001. Industry's reaction to the proposal varied between cautious optimism and downright skepticism. Philip Flaxton, CEO of Interforum, the campaigning body for digital business, welcomed the news. "These initiatives mark the government's undoubted commitment to improving the whole trading arena for UK," he said. A spokesman for the British Chambers of Commerce said there was a commercial digital divide forming that could damage UK business. He said: "In isolation this is not a big commitment by the government, but seen as part of government's other initiatives on training this is definitely a positive step, in a crucial area." However Abid Kazim, entrepreneur and CEO of consultancy Carpe Diem, was less impressed. "£5.5m isn't enough to launch a serious web portal, its certainly not enough to launch a web portal and an incubator. You have to question whether or not this is all smoke and mirrors from the government.