Britain's position as a world leader in emerging technologies was bolstered by a £750 million Budget package aimed at industry.
The strategic investment fund will help companies make the most of research and development in areas such as digital systems, biotech, advanced manufacturing and crucially "green" technology,
A consistent complaint in the past has been that the UK is too slow to exploit the fruits of discovery and innovation.
The new money is intended to help businesses weather the economic downturn by transforming scientific ideas into useful products and services.
In another move, Chancellor Alistair Darling announced a fresh look at the way the tax system affects innovative industries.
The pharmaceutical industry in particular has repeatedly warned that without better tax incentives, global companies will vote with their feet and move their research and development out of the UK.
The £750 million package includes a hefty £250 million element earmarked for low carbon business opportunities and innovation. This will include initiatives on low carbon vehicles, as well as nuclear and renewable energy industries.
A further £50 million will got to the Technology Strategy Board to help it foster innovation and new .....continued below
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technologies, and £10 million will specifically be aimed at exports.Business Secretary Lord Mandelson said: "Backing green, low carbon businesses and technologies will be a priority for the new fund. Ed Miliband (Energy and Climate Change Secretary) and I are determined British business should be world leaders in the technologies and services the world will need as we use energy more efficiently and combat climate change.
"Britain doesn't need to be pessimistic about our economic future as long as we prepare for it. The new fund announced today is a big step forward."
Engineering and technology experts broadly welcomed the Budget proposals, but some thought they did not go far enough.
Dr Robert Kirby-Harris, chief executive of the Institute of Physics, said it was "commendable" that science was being asked to play a key role in ensuring Britain's economic future.
He added: "We are confident that the UK science base is up to the challenge. It must be remembered, however, that scientific advances - in renewable energy research, in the digital industries that have spurred the communications revolution and in other important future industries like biotechnology - require a healthy research base.
"We must continue investing in order to ensure that the UK has a healthy pipeline of scientifically-trained individuals and to maintain and strengthen our leading position in research and its applications."
Tom Foulkes, director general of the Institution of Civil Engineers, said there was "much to be welcomed" in the Budget.
