Effective policies for innovation support
- Document type
- Corporate author(s)
- Economic & Social Research Council
- Date of publication
- 1 June 2013
- Evidence Briefings
- Small business & enterprise: the practicalities of running a small business and the theory of entrepreneurship, Trends: economic, social and technology trends affecting business
- Business and management
- Material type
Policy supporting business is rarely subjected to rigorous evaluation. As a result we have no reliable way of knowing if large sums of public money are being used effectively or wasted on initiatives which don’t work. Previously there has been remarkably little use of rigorous experiment design in industrial and innovation policy. While large amounts of public money are spent supporting businesses around the world, nobody knows whether it’s having any real impact. In stark contrast with fields like medicine, new approaches are introduced without testing. At a time when public resources are scarce it’s more important than ever that we find out what works and what doesn’t – and that principle should apply as much to business support as it does to programmes in healthcare or schools.
A Nesta report co-funded by the ESRC has used the ‘Creative Credits’ innovation scheme as a case to carry out a robust impact evaluation. In the scheme’s pilot in the Manchester City Region, 150 Creative Credits vouchers with a value of £4,000 were awarded to eligible SMEs to develop collaborative innovation projects with a creative business. The SMEs were required to contribute a further £1,000 of their own towards their project.
The evaluation showed that Creative Credits initially boosted innovation and sales growth in SMEs in the six months following completion of the scheme - but after a further six months these impacts were no longer statistically significant. This decrease in impact would have remained hidden with normal evaluation methods used by government, and indicates that randomised controlled trials should be used more widely in the evaluation of business support policies.
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