Creative credits: a randomized controlled industrial policy experiment

This report examines the results of a pilot study, which used a method of evaluation called randomised control trials (RCTs) to see if a popular business support scheme called Creative Credits worked effectively. The pilot study, which began in Manchester in 2009, was structured so that vouchers, or 'Creative Credits', would be randomly allocated to small and medium-sized businesses applying to invest in creative projects such as developing websites, video production and creative marketing campaigns, to see if they had a real effect on innovation. The research found that the firms who were awarded Creative Credits enjoyed a short-term boost in their innovation and sales growth in the six months following completion of their creative projects. However, the positive effects were not sustained, and after 12 months there was no longer a statistically significant difference between the groups that received the credits and those that didn’t. The report argues that these results would have remained hidden using the normal evaluation methods used by government, and calls for RCTs to be used more widely when evaluating policies to support business growth.

[1]  J. V. Reenen,et al.  The Profitability of Innovating Firms , 1993 .

[2]  Jeffrey R. Kling,et al.  Mechanism Experiments and Policy Evaluations , 2011 .

[3]  S. Roper,et al.  Knowledge , openness , innovation and growth in UK business services , 2010 .

[4]  J. Niosi.  Alliances are not enough explaining rapid growth in biotechnology firms , 2003 .

[5]  Luke Georghiou,et al.  What Difference Does it Make? Additionality in the Public Support of R&D in Large Firms , 2014 .

[6]  W. Powell.  Learning from Collaboration: Knowledge and Networks in the Biotechnology and Pharmaceutical Industries , 1998 .

[7]  Erik Nesset,et al.  Coherence between policy formulation and implementation of public research support? An examination of project selection mechanisms in the Norwegian Research Council , 2011 .

[8]  Josh Lerner,et al.  The Financing of R&D and Innovation , 2009 .

[9]  R. Verganti.  Design, Meanings, and Radical Innovation: A Metamodel and a Research Agenda* , 2008 .

[10]  Gerry Stoker,et al.  Design Experiments: Engaging Policy Makers in the Search for Evidence about What Works , 2009 .

[11]  Ammon Salter,et al.  The role of openness in explaining innovation performance among UK manufacturing firms , 2004 .

[12]  Constance E. Helfat,et al.  INNOVATION OBJECTIVES, KNOWLEDGE SOURCES, AND THE BENEFITS OF BREADTH , 2010 .

[13]  Nina Rosenbusch,et al.  Is innovation always beneficial? A meta-analysis of the relationship between innovation and performance in SMEs , 2011 .

[14]  Do innovation vouchers help SMEs to cross the bridge towards science , 2006 .

[15]  A. Jackson.  An evaluation of evaluation: problems with performance measurement in small business loan and grant schemes , 2001 .

[16]  M. Guha.  The Sage Encyclopedia of Social Science Research Methods , 2005 .

[17]  Clare Tagg,et al.  Qualitative research and computing: Methodological issues and practices in using QSR NVivo and NUD*IST , 2002 .

[18]  Robert Miller,et al.  The A-Z of Social Research , 2003 .

[19]  G. Gemser,et al.  How integrating industrial design in the product development process impacts on company performance , 2001 .

[20]  Gary Burtless,et al.  The Case for Randomized Field Trials in Economic and Policy Research , 1995 .

[21]  P. Holland.  Statistics and Causal Inference , 1985 .

[22]  D. C. Sutton.  Making strategy: the journey of strategic management , 2001 .

[23]  S. Roper,et al.  Modelling the innovation value chain , 2008 .

[24]  Bill Gillham,et al.  Case Study Research Methods , 2000 .

[25]  Huey-tsyh Chen.  Theory-driven evaluations , 1990 .

[26]  Jacques Mairesse,et al.  Research Investment, Innovation and Productivity: An Econometric Analysis at the Firm Level , 1998 .

[27]  Jan Henrik Sieg,et al.  Managerial Challenges in Open Innovation: A Study of Innovation Intermediation in the Chemical Industry , 2010 .

[28]  Rachel Cooper,et al.  Characterizing the Role of Design in New Product Development: An Empirically Derived Taxonomy* , 2005 .

[29]  Ian Hargreaves,et al.  A manifesto for the creative economy , 2013 .

[30]  A. Bryman,et al.  Business Research Methods , 2004 .

[31]  A. Strauss,et al.  The discovery of grounded theory: strategies for qualitative research aldine de gruyter , 1968 .

[32]  Michael Anyadike-Danes,et al.  Measuring business growth:high-growth firms and their contribution to employment in the UK , 2009 .

[33]  Dirk Czarnitzki,et al.  The Relationship between R&D Collaboration, Subsidies and R&D Performance: Empirical Evidence from Finland and Germany , 2007 .

[34]  R. Falk.  Behavioural Additionality Effects of R&D Subsidies , 2004 .

[35]  H. Chesbrough.  COVER STORY • Open Innovation: A Key to Achieving Socioeconomic Evolution • 3 How Smaller Companies Can Benefit from Open Innovation , 2010 .

[36]  Keith Goffin,et al.  Maximizing the Value of Industrial Design in New Product Development , 2010 .

[37]  Priit Vahter,et al.  Openness and Innovation Performance: Are Small Firms Different? , 2014 .

[38]  Roberto Verganti,et al.  Design-Driven Innovation , 2014 .