Investors are undermining entrepreneurs in creative industries by failing to support them, a survey has shown.

Industries such as computer games, fashion, design and architecture were failing to achieve their full potential due to lack of private cash, according to the National Endowment for Science, Technology and the Arts (Nesta).

The UK risked being overtaken by other nations due to lack of an investment strategy for the sector, the study added.

Urgent action was needed to bring companies and investors together to improve intelligence and decision-making.

The poll of 100 investors found although 64 per cent believed the UK had the potential to lead the world in creative industries, only 22 per cent of those questioned would be prepared to invest in the sector.

Nesta said creative industries contributed £11.4 billion to the UK balance of trade in 2001, well ahead of construction and the insurance and pensions sector.

The sector had grown by an average of eight per cent in 1997-2001, against 2.6 per cent for the economy as a whole.

Friday February 13, 2004