Regional Selective Assistance in Scotland: econometric analysis 2004/05 – 2010/11

The research provides an analysis of the impact of Regional Selective Assistance (RSA) on employment and turnover growth in supported companies in Scotland over the post-2007 period.

The research consisted of an analysis of RSA offers and payments made to 693 firms over the 2004-12 period. Firms in receipt of RSA were then matched to the Business Structure Database, and the resulting analysis covered 422 firms, £122 million of offers and £99 million of payments. Econometric analysis was used to assess the impact of RSA assistance on growth, isolating the impact of assistance from other contributing factors. This analysis was conducted over the 2007-11 and the 2010-11 periods and looked at the effect of assistance on employment, turnover and productivity growth.

The research found that RSA has had a positive impact on the Scottish economy and was responsible for generating additional jobs within a period of economic downturn. It is suggested that without RSA, it is likely that the supported companies would not have performed as well , , and that employment would have been lower. The research indicates that it is also likely that businesses would not have modernised or upgraded their skills and processes to the same extent without RSA. It was found that during the 2004-11 period, RSA-assisted firms grew by around 3% per annum compared to 0.4% for non-assisted firms, however during the 2010-11 period employment within both sets of firms fell. Overall, the econometric analysis found that being in receipt of RSA had a positive impact on employment and turnover growth, and that it was offers of assistance that had an effect on growth, with no such impact detected from payments. The research suggests that up to 3,650 jobs were added to the economy during 2007-11, based on payments made to firms in receipt of RSA, and that these jobs generated value added of around £201 million, or £26,000 per job.

The report makes no formal recommendations.