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18.06.13

Nesta urges use of RCT to evaluate innovation

Greater use of randomised control trials (RCT) could help the Government evaluate the effectiveness of business support schemes, a new report by Nesta suggests.

A pilot run in Manchester from 2009 randomly allocated ‘Creative Credit’ vouchers to SMEs applying to invest in creative projects, to investigate their effect on innovation.

Firms awarded the vouchers saw a short-term boost in innovation and sales growth for the first six months following the completion of their creative projects, but 12 months afterwards there was no statistically significant difference.

Nesta suggest that if RCTs were used more often it would be easier to see which type of policy works best, and ensure less public money is wasted.

Hasan Bakhshi, director of creative economy at Nesta and one of the report’s co-authors, said: “We know that vast amounts of public money are spent supporting businesses. For example, the Technology Strategy Board will spend approximately £440m in 2013/14, and the Regional Growth Fund to promote the private sector is worth over £2.7bn over 2011-12 to 2015-16.

“Yet, the impact this spending is having is still unclear. BIS’s recent announcement to use RCTs in evaluating its growth vouchers programme is welcome but this is still only the exception rather than the rule.”

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