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SMEs: 'Life-blood of government IT'?
Only if they can muscle in on the big boys...

By Gemma Simpson

Published: Wednesday 24 January 2007

A government minister has called for smaller tech companies to play a bigger part in the development of technology to be used in healthcare.

Margaret Hodge, minister for industry and the regions, today said SMEs play an "absolutely crucial role", noting their ability to tap into niche markets.

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Speaking at the London Telehealth Symposium, Hodge said SMEs must contribute alongside the "titans of the industry".

But how likely is it that SMEs will be able to win out over the public sector's usual IT suppliers? In 2005, the Office of Government Commerce revealed 11 companies win 80 per cent of government IT contracts in the UK.

One route is to encourage collaboration between academia and wider industry as so many tech SMEs start as university spin-outs. Funding for research, in and out of universities, is growing but there is still "a long way to go" to increase this type of co-operation, which will then feed into healthcare, Hodge added.

The government has tried to give smaller companies a better shot at bidding for public sector contracts following the launch of a website last year listing 7,000 new contracts worth less than £100,000.

Small and medium-sized suppliers have previously accused the government of running a "closed shop" and preventing SMEs from competing with the bigger IT vendors for public sector contracts, some of which are in the NHS.