Belmana Ltd was commissioned by the National Physical Laboratory (NPL) and Innovate-UK (IUK) to conduct an impact assessment of the innovation support provided to a large sample of UK firms. Belmana’s analysis examined how this support affected the subsequent performance of these firms in terms of their employment, survival, and wage premiums.

Innovate UK invested over £2.4b in more than 20,000 business innovation projects since 2004, with growing amounts of spend since 2009. The largest portion of the Innovate UK grant funded projects related to collaborative R&D. The National Physical Laboratory support, covering the period from 2002 to 2017, has over 59,000 instances of support completed by 2017. The interventions include free website downloads, contracted collaboration with NPL and paid-for research or measurement services. Further, the National Physical Laboratory is part of the National Measurement System (NMS) with partner bodies – the National Engineering Laboratory and the Laboratory of the Government Chemist – providing independent measurement services to innovative businesses.

This report presents results measuring the impact of the business support provided by Innovate UK and the NMS. It primarily uses data derived from the administrative systems in each organisation about the support provided by each body to businesses. This is then linked to firm-level data held in the ONS Secure Research Service, primarily the business data about employment, turnover and the results of surveys conducted by ONS as it compiles economic statistics on productivity, research and development, and innovation. The research seeks to answer questions emerging from earlier work, which focused on the employment growth seen in businesses supported by innovation funding from Innovate UK or the National Physical Laboratory. A key part of the new work is to explore what additional analysis can be undertaken by augmenting the ONS Business Structure Database with other public and survey data about businesses.

Public Support for Innovation and Business Outcomes: An Econometric Analysis