Fred Wilson had a great post last week responding to a suggestion (by Tom Friedman of the New York Times) that the government put its stimulus money into venture capital rather than the auto industry. The sentiment is a good one, but the idea is bad, as I highlighted last year.
Gordon Brown and the propeller-heads at NESTA would do well to digest Fred's post carefully, as they are already ahead of the US in making this bad idea a reality. As in the US, there is no shortage of capital for good ventures in the UK. Any money from the government is likely to flow to bad business ideas or bad investors, depress returns for good investors, and crowd out smart money.
Don Dodge suggests some alternative ideas for $1bn to promote entrepreneurship here. I hope Gordon reads blogs as well as policy papers.