4.6.3 Interestingly, Table 4.15 reveals that the proportion of unsuccessful applicants that achieved project outputs that were taken into the marketplace was not much less than the proportion of award winners doing the same. The unsuccessful applicants may have been able to take products and services to market because of relatively low levels of innovation and/or technical risk. Table 3.46 confirms this to some extent in that 43% of unsuccessful applicants thought that they were refused GRD because their project was not innovative enough. Few were turned down at the application stage on additionality grounds (ie their projects would not be additional). This was probably more likely to have occurred at the pre application stage in discussions with the RDA. It will be recalled from Chapter 3 however, that relatively few of the unsuccessful applicants’ intended projects (i.e. just 27% of the total) actually went ahead.
Table 4.14 To what extent did your project satisfy the objectives you were
talking about earlier?
Percentage (%)
Unsuccessful applicants Award winners
Wholly 19 46
Largely 29 34
Partly 37 15
To small extent 4 4
Not at all 11 2
Effective Sample Size 38 458
Table 4.15 Did, or will, the project result in any new or improved products and services or processes reaching the market, or in offering
R&D services / contract research to 3rd parties?-Product(s) /
Service(s):
Percentage (%)
Unsuccessful applicants Award winners
Products:
Yes 61 67
No 24 25
Not sure yet 15 9
Processes:
Yes 35 37
No 51 55
Not sure yet 14 8
R&D services/Contract research:
Yes 20 22
No 64 70
Not sure yet 17 8
Effective Sample Size 38 458
A number is shown in bold where, taking into account the margin of error due to sampling, we are 95% certain that it is different from the number in the left hand total column (using a Chi-Squared statistical test) Source: PACEC Survey (Q31A1)
4.6.4 Table 4.16 shows that the relatively few unsuccessful applicants whose project outputs had reached the marketplace rated the level of technological innovation in their projects in broadly the same way as the award winners whose project outputs had reached the marketplace. Table 4.17 indicates that the unsuccessful applicant’s project outputs had reached the marketplace slightly later overall.
Table 4.16 (if new/improved products, processes or services reached
market) What was the level of technological innovation in these products / services / processes?
Percentage (%)
Unsuccessful applicants Award winners
Significant 40 39
High 37 40
Table 4.17 Year in which new/improved products, processes or services reached market
Percentage (%)
Unsuccessful applicants Award winners
2000 to 2003 30 36
2004 or later 70 64
Effective Sample Size 23 343
A number is shown in bold where, taking into account the margin of error due to sampling, we are 95% certain that it is different from the number in the left hand total column (using a Chi-Squared statistical test) Source: PACEC Survey (Q33)
4.6.5 Table 4.18 shows that unsuccessful applicants were twice as likely as award winners to cite lack of finance as a barrier to taking their project outputs into the marketplace; and this finding lends weight to the widespread perception amongst award winners that being an award winner made it easier for them to obtain further finance for this purpose (see Table 4.12).
Table 4.18 What, if anything, has prevented, or will prevent, you from
introducing the products / services as a result of the project into the market place?
Percentage (%)
Unsuccessful applicants Award winners
Lack of finance 50 24
Other(s) 13 18
Failure to achieve technical objectives 7 11
Lack of marketing skills 3 5
Commercial feasibility: inadequate sales
prospects 1 12
None of the above 35 42
Effective Sample Size 35 440
Note: Table excludes barriers mentioned by fewer than 5% of both unsuccessful applicants and award winners
Respondents could select more than one option; so percentages in any column may sum to more than 100 Source: PACEC Survey (Q34A)
4.6.6 Table 4.19 suggests that unsuccessful applicants whose project outputs were taken to the marketplace were, in general, less likely than the award winners to acknowledge other effects on the business, such as technological problems being overcome, clarifying the technical, or commercial, feasibility of ideas. However, there were some greater differences shown, a stronger culture in terms of R&D, an improved understanding of innovation, a stronger inclination to collaborate and network (with SMEs and HE), and develop intellectual property.
Table 4.19 Did the project have (or is it likely to have) any of the following effects on your business?
Percentage (%) Unsuccessful
applicants Award winners Improved tech. knowledge / skills
Technological problems were overcome 83 89
Technical feasibility of the idea has become clear 85 91 Commercial feasibility of the idea has become clear 79 84 Better able to manage innovation / technical risk 73 78
Improved products / services
Firm improved the quality of its products / services 77 76
Improved the quality of its processes 59 62
Reduced production costs 40 39
Investment in R&D and innovation
Firm improved its attitudes / culture towards GRD /
innovation 45 70
Increased R&D expenditure/activity it undertakes 63 62
Invested more in innovation in general 64 67
Invested more in significant technological innovation 62 62
New intellectual property has been developed 53 65
New patents have been applied for 49 47
Intellectual property (e.g. a patent) has been obtained 49 48
Academic / leading edge research exploited 44 44
Firm has improved its innovation / tech understanding 63 80
Market position
Firm has opened up new markets 68 68
Image of the firm has improved 73 75
Networks & supply chain relationships
Firm is now more inclined to use external business
support 41 58
Has collaborated/networked more with other firms (eg
SMEs) 45 59
Has collaborated/networked more with universities and
colleges 39 46
Has collaborated/networked more with other
research/technology organisations 25 44
Other effects 4 7
None of the above 1 2
Effective Sample Size 37 459
Respondents could select more than one option; so percentages in any column may sum to more than 100 A number is shown in bold where, taking into account the margin of error due to sampling, we are 95% certain that it is different from the number in the left hand total column (using a Chi-Squared statistical test)
Table 4.20 Has your business claimed R&D tax credits?
Percentage (%)
Unsuccessful applicants Award winners
No 44 54
Yes other projects only 19 18
Yes including this project 9 15
Not sure 28 13
Effective Sample Size 36 452
A number is shown in bold where, taking into account the margin of error due to sampling, we are 95% certain that it is different from the number in the left hand total column (using a Chi-Squared statistical test) Source: PACEC Survey (Q44)
4.6.8 The survey shows that unsuccessful applicants whose project outputs were taken to the marketplace were, in general, less likely than the award winners to acknowledge other effects on the business, such as technological problems being overcome, clarifying the technical, or commercial, feasibility of ideas. In particular award winners showed a stronger culture in terms of R&D, an improved understanding of innovation, a stronger inclination to collaborate and network (with SMEs and HE), and develop intellectual property.
4.6.9 Overall the results of the research show the positive impacts of GRD in that award winners, compared to unsuccessful applicants, were much more likely to have developed and exploited products/services and processes and improved their innovation and technology capabilities. This does provide some evidence that the businesses that would benefit from GRD had been correctly selected for support.
Panel 4.1 Summary of key findings
● 80% of award winners said that their projects wholly or largely satisfied their objectives, and only 6% said the reverse.
● Two-thirds of projects led to products that had reached, or would reach, the market. Smaller, but still substantial proportions of projects led to processes or services that had done, or would do, the same.
● The large majority of award winners (79%) whose projects had reached the marketplace rated the level of technological innovation embedded in the outputs as significant or high.
● Nearly a quarter of award winners cited lack of finance as a barrier to introducing their project outputs into the marketplace, but a larger proportion indicated that there were no particular barriers.
● Award winners’ projects had a wide range of important intermediate effects, such as:
- Improved attitudes to R&D, increased R&D and innovation expenditure and investment in significant technology
- Improved skills as the technical and commercial feasibility of ideas become clearer
- A better understanding of innovation and the ability to manage risk
● Just over a third of award winners sought further finance to help them take their project outputs into the marketplace. Most of those that sought further finance were offered it and accepted it.
● Over the duration of their projects GRD businesses improved their ability to lever in private sector finance especially for Venture Capital funds (share / equity finance) and bank loans.
● Nearly half of respondents agreed that being an award winner made it easier to obtain finance. Part of this is because the award winners have had to go through an application process to review GRD which acts as a form of due diligence. This can give investors more confidence to invest in the GRD businesses and the project and potentially removes some of the risk.
● The minority of unsuccessful applicants’ projects that went ahead anyway were considerably less effective than award winners projects in relation to their objectives.
● Nonetheless, unsuccessful applicants’ projects that went ahead anyway without GRD were as likely as award winners’ projects to lead to outputs that were taken into the marketplace including products/services and processes. However, almost half were not able to obtain GRD funding as their ideas were not considered to be sufficiently innovative. Hence it was probably quicker to take them to market.
● Unsuccessful applicants whose projects went ahead anyway were twice as likely as award winners to cite a lack of finance as a barrier to taking the outputs of their projects into the marketplace.
5
Effects on the business performance of award
winners
5.1 Introduction
5.1.1 This chapter examines both objective and subjective data on the effects of the grant for R&D on the performance of grant winners. The examination of objective data starts with a multivariate analysis of the impact of success in winning a grant on the change in size of the grant winners between the base year of winning the grant and the current year. Size is measured in terms of turnover and employment. This multivariate analysis is designed to test whether the award of a grant makes a difference to business performance in these terms. In doing this it allows for any tendency for superior performing firms to be more likely to have won a grant in the first place. The examination of subjective data which then follows is based on a comparison of grant winners' views on the contribution that winning a grant made to their turnover, and employment performance with their views on how their business might have performed if they had not received a grant.