Understanding the Return on Investment of Innovate UK
Today the Innovation and Research Caucus is publishing a new report providing new insights on the economic returns of public funding for R&D/innovation invested by Innovate UK.
Since 2004, Innovate UK has injected more than £2.5bn to support business R&D/innovation in the form of grants, leveraging at least £4.3bn of associated private sector investment. Innovate UK has therefore a critical role to play in increasing the overall level of R&D investment in the economy and fulfilling the Government’s target of raising R&D expenditure as a percentage of GDP to 2.4% by 2027 and 3.0% in the longer term.
In this report Dr Chris Dimos (University of Bath - Centre for Governance, Regulation and Industrial Strategy) and Professor Tim Vorley (Innovation and Research Caucus / Oxford Brookes University) provide estimates of the economic returns of Innovate UK grants based on information from thousands of UK businesses covering the 2008-2019 period.
By estimating what would have happened in the R&D/innovation spending of recipient businesses in the absence of Innovate UK funding, the authors not only estimated the returns of the grant itself but also the returns of the additional business spending in R&D/innovation as a result of the grant. Overall, Chris and Tim demonstrate that the public investments have produced a strongly positive boost to the UK economy, of £6.21 of value-added for every £1 Innovate UK invests. Approximately three fifths of this impact is delivered to recipient businesses while two fifths is delivered as a wider effect on the UK economy.
This significant impact of Innovate UK grants underlines the value of investing in innovation as a driver of economic growth and opportunity. However, these findings provide no guarantees for the future. Continuing to invest in R&D capable of yielding high returns not only for the recipient business but for the economy as a whole is paramount in realising the Government’s vision and ambition to make the UK a global hub for innovation by 2035.