A recent report on the state of the technology sector, published by consultancy firm Deloitte, suggests the nation's IT industry is at a critical juncture. The report identifies a number of obstacles the UK tech industry must overcome to achieve success in future. These include the growing competition from China and India, and the current lack of UK-based IT firms with global status.

It also points out that with the right support from the right areas, the UK has the opportunity to build a world-class technology industry. The education system needs to cultivate graduates with both technology and commercial abilities, so they can sell their ideas to financial backers rather than just develop them with their academic peers. This would also help the financial sector to get over its mistrust of the IT sector, which took root after the dot-com bust.

The government could also help by facilitating dialogue between academia and financiers, and reducing red tape and taxes.

Deloitte highlighted Vodafone, Sage and ARM as examples of UK technology firms succeeding on a global scale. However, the examples are few and far between, especially compared with the US and Far East. And they are vastly outnumbered by UK firms that have failed to last the distance. Only last week, Lastminute.com made its last trade on the London Stock Exchange. The UK dot-com pioneer is now part of Travelocity owner Sabre Holdings' group and has become another example of a UK technology firm swallowed up by an overseas rival. And last month, US mobile giant Motorola stepped in to acquire the IP portfolio and research teams of struggling UK handset maker Sendo, which was put into administration in June.

The European Commission did nothing to brighten the gloomy outlook for UK IT with the release of its latest figures on technology and science research and development. According to the EC, the IT industry throughout Europe may face problems because R&D investment has been falling since the start of the decade. In 2003 less than two percent of the EU's GDP was spent on R&D. In the same year, the US invested two-and-a-half percent, while Japan spent more than three percent. The EC blames European firms' reluctance to invest for the funding gap, pointing out that not much over half of R&D was funded by the private sector in 2002.

I don't know about other European countries, but the UK's tech sector could certainly benefit from some changes. I'd say more is required than a bit of extra faith from financial institutions or a few tax breaks. The mentality of this nation does not often warm to success or champion winners in the business world. Entrepreneurship may be a valued trait in other nations - especially in the US - but in the UK we tend to be taught it's the taking part that counts, and we don't see entrepreneurs such as Richard Branson and Alan Sugar in a particularly positive light.

Deloitte is right to point out that technology graduates need more commercial acumen to sell their ideas. But they also need to be taught and shown that building up a successful IT firm in this country is a worthwhile and sustainable ambition, and that they should have an eye on acquiring and expanding their own businesses rather than taking the first sell-out opportunity.