Increasing the impact of public investments in innovation
Three questions
What to invest in
How much to invest R&D Labour Productivity 60% Intangibles Unicorns 1.12% European Union United States
How to invest effectively 14740 evaluations of support schemes €150 Little credible billion evidence on what works, and spent every year on innovation, what doesn’t entrepreneurship and business growth support programmes in Europe alone But slow productivity growth and convergence in Europe Credible (2.4%) + Impact (0.6%) Source:http://www.innovationgrowthlab.org/blog/much-%E2%82%AC152-billion-spent-acro Source: Systematic reviews conducted by the What Works Centre for Local Economic Growth ss-europe-supporting-businesses-does-it-work at the LSE (Credible: Level 3 Maryland Scale – Positive impact on employment)
Becoming more experimental
Why experiment Novel solutions to De-risk Continuous policy challenges new programmes improvement Time-limited unless Better evidence & Save money demonstrated impact decisions More impactful policies & better value-for-money
Trials can have a powerful impact More effective messages : the UK’s Business Additional 800 Department used ‘nudging’ trials experimenting with mentors recruited, different language to recruit business mentors policy target met New research collaborations : Harvard Medical School Researchers were 75% researchers were randomised to meet as part of a more likely to grant programme information session collaborate More successful startups by making a small tweak : Startups raised +50% the Startup Chile accelerator trialled sharing more funding application feedback with its participants Helping businesses grow with a low-cost networking Increased firm revenue intervention : two academics trialled monthly meetings by 8% between business owners in China Read more about what we’re learning from policy experiments
How to become experimental right incentives experimentation funds
An experimental €1 bn productivity fund An impactful BICC investment Leverage BICC to increase the effectiveness and efficiency of member states investment €1,000 billion European countries’ expected expenditure in policies to support businesses to innovate and grow in 2021-2027 Invest 0.1% (€1 bn) to find ways to maximise the impact of the remaining 99.9%
Some potential programme areas
Innovation in how we regulate SANDBOX Testbeds Regulators’ Pioneer Fund
Reinventing business regulation The “Eurocompany”: a new full-fledged business regime, sitting alongside national regimes without replacing them (either EU-wide or for a smaller group of countries) Innovate in regulation Less-fragmented Reduce competitiveness and enforcement internal market differentials Piecemeal regulatory reforms Give startups the option to Give entrepreneurs from constrained by status quo operate under the same rules countries with poor regulatory and institutional inertia → across the EU through a environments the opportunity This 29th regime would single digital platform, while to opt-out from inefficient create a new system from preserving the rights of national rules (introducing scratch designed for the 21st member states over specific regulatory competition century, not one inherited issues → Help innovative without a race to the bottom) from the 19th century startups to grow faster → Accelerate convergence
Changing systems TRANSFORM FUNDING Higher innovation More impactful support Experimental 1 billion programmes and funding productivity fund instruments Faster economic growth TRANSFORM REGULATION More innovation-friendly “Eurocompany” Better living and less fragmented business regime regulatory regime standards
Conclusion
Annex: About the Innovation Growth Lab
A global partnership bringing together governments, foundations and researchers to scope, What IGL is develop and test different approaches to increase innovation , support high-growth entrepreneurship and accelerate business growth
IGL – A global community for better policies through experimentation IGL Research Network IGL Partners Over 85 researchers from around the world: IGL Scientific Committee Nick Bloom Stanford Graduate School of Business | Dietmar Harhoff Max Planck Institute for Innovation and Competition | Karim Lakhani Harvard Business School | Josh Lerner Harvard Business School | Fiona Murray MIT Sloan | Mark Schankerman LSE | Scott Stern MIT Sloan | John Van Reenen MIT Sloan Other organisations we’ve worked with:
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