<£100,000 R&D Grant and Innovation Support Grant evaluation

Scottish Enterprise’s (SE’s) below £100,000 R&D Grant and Innovation Support Grant (ISG) are aimed at increasing R&D and innovation activity in the Scottish company base. The evaluation assesses the strategic case for these two products and their impact in terms of company experience. The evaluation covered the period 2007-2010 (though 2010 only included projects funded in the first three quarters of the year and therefore does not represent a full year’s activity). A full economic impact assessment was also included.

The methodology consisted of desk-based research, stakeholder consultations and company survey.

The evaluation found that there was a strong strategic case for intervention in both R&D and innovation activity. Scotland lags behind other UK nations and regions on Business Enterprise Research and Development (BERD) as well as on key measures of innovation performance (such as innovation activity and product innovation). The grant schemes are an appropriate way to address these issues. There is also a clear fit with policy for both products and the potential for them to make a contribution to the achievement of policy goals. There has been mixed use by key sectors. The evaluation has shown that each grant is used primarily by companies classed as either key sectors or growth sectors. What is not clear is the extent to which sectors beyond these groups are being targeted. Both schemes are generally seen to be working well, with only minor issues around the processing and evidencing of claims. There is very positive leverage associated with the two schemes. Participating companies have realised or are realising a wide range of benefits, including the development of intellectual property and its use in new products, the development of wider innovation in support of the new products and access to new revenue streams through the sale of products. The grants are also making a contribution to key national government priorities and SE targets. In addition to the innovation related benefits, the process of accessing the grant and delivering the project was also leading to improved company capability. The evidence of wider knowledge or market spillovers was less clear, with some evidence that any effects within Scotland could be lower than effects elsewhere. This suggests the benefits are largely felt within the companies rather than across the economy as a whole. Nevertheless, the economic impact assessment suggested that there is a positive economic impact arising from the support and that the projects both deliver clear value for money.

It is recommended that both grant schemes should continue. More specific recommendations for project improvement are also made, including: SE should clearly articulate the balance between use by key sectors and the wider business base, project monitoring should explicitly consider sectoral take up and guidance should be developed for companies to ensure a minimum standard.