A strategic review of innovation support

The aim of the review was to understand attitudes to innovation among Scottish companies, including how and why they invest in innovation and how important they feel innovation is to their future growth and performance. It also sought to evaluate the outputs, outcomes and economic impact of innovation to these companies over time.

IFF Research carried out telephone interviews with 284 “innovative” businesses across Scotland between June and August 2015, all of whom had received direct innovation support from Scottish Enterprise (SE) and/or Highlands and Islands Enterprise (HIE). This research was supplemented by SE analysis of the data and an examination of the wider context of SE support to companies over the previous 10 years.

The review found that all 284 companies featured were particularly focused on product innovation. In the case of companies who had received some form of support, two of the main reasons they gave for innovating were to increase their market share (37%) and to enter new markets (24%). 98% of these respondents felt that innovation was important to their future growth, with companies having spent £195.6m over the previous three years on “innovation activities”. Most commonly these companies invested in internal R&D (67%), although a large number also invested in new or upgraded computer software (65%) and hardware (63%). 89% of companies surveyed emphasised that existing internal resources, in particular their staff, were vital to delivering innovation. However over half of the businesses surveyed (58%) had also used partners and external agencies to help deliver innovation projects, including suppliers, customers, universities and public agencies. Outcomes, impacts and benefits were all reported to be positive. The broad findings relating specifically to the strategic and economic impact of innovation support were positive and point towards supported businesses developing a “culture of innovation” and improving Scotland’s overall innovation performance. The review found that many companies benefitted from a mix of innovation support and wider business support, most notably Market Development and Business Improvement. The review also suggests that the depth of engagement between the economic development agencies and these companies seemed to be beneficial to their success.

The review does not make any specific recommendations.