The Department for Business, Energy and Industrial Strategy (BEIS) has today published research by Frontier examining the impact of public funding for private sector innovation on later business performance. The work, commissioned by BEIS and Innovate UK (the UK’s innovation agency), finds robust evidence that innovation support helps firms to survive longer and boosts employment.
The findings relate to innovation support provided by two organisations: Innovate UK, mostly in the form of grants for business R&D; and the National Measurement System (NMS), mostly in the form of subsidised contract research and access to measurement services. Each provided data on the firms they had supported between 2008 and 2012, which was matched to administrative data on firm performance measured in terms of employment and turnover. Econometric methods were used to compare trends in performance for supported firms and similar non-supported firms, to isolate the impact of the innovation support on performance.
Some of the main conclusions of the study are that:
Frontier’s study contributes to a growing evaluation literature on the impact of public innovation support on businesses. It comes shortly after the publication of the Industrial Strategy green paper and the Spring Budget which announced £270 million in 2017 and 2018 for the first wave of ‘Challenge Fund’ support to help develop disruptive technologies.
Frontier regularly evaluates the impact of government policy on innovation, growth and productivity.
For more information, please contact Saskia Nett on email@example.com, or call +44 (0)20 7031 7000.