The government has been asked to do more for software innovation by an industry specialist, it has emerged.

Head of software and IT services at PricewaterhouseCoopers (PwC) Jass Sarai said the UK software industry was set to grow over the next couple of years, but only marginally.

Mr Sarai continued: "Our software industry is established around innovation and the government needs to continue to do more to help them to do more with their innovation."

He recommended that the government rewards companies putting money into both research and development for the furthering of the industry, with grants and favourable tax positions being the best way to achieve this.

PwC found in recent research that British firms accounted for the top 15 per cent of the 100 biggest software companies in Europe, taking in worldwide revenue of £104.8 million and making more money than any of their western European counterparts.

Sage came top of the survey, with Misys and Logica falling into second and third place.

According to a recent survey by Connect, the two biggest IT headaches for businesses were 'everyday hassles with IT' (37 per cent) and 'security concerns' (32 per cent).