Published: 14 November 2018
R&D investments enhance knowledge, underpin innovation and facilitate the creation of new firms; this recognised source of economic development has become integral to government policy in many countries. While all firms face difficulties engaging in R&D, new and young firms are most affected facing internal and external factors that inhibit investment or impede the process. A decision to invest in R&D often stalls due to concerns about appropriation and/or limited access to appropriate finance, but once engaged the barriers are found in the nexus of knowledge, networks and skills that underpin dynamic capabilities and the enhancement of a firm’s absorptive capacity. In particular, the emphasis placed in the beginning upon science/technology expertise, at the expense of managerial acumen, undermines a firm’s ability to recognise and exploit commercial opportunities.
Assessing the impact of Covid-19 on Innovate UK award holders Survey and case-study evidence Wave 1 – June/July 2020
This is the first in a series of benchmark reports on the impact of Covid-19 crisis on the status of Innovate UK award holders. The analysis focuses on the impact of the crisis over the last three months and firms’ plans for the next three-month period. Both firm level and project-level effects are considered. Data was derived from extensive survey work with IUK award holders and, where survey respondents agreed, more detailed interview follow-up.
The dynamic nature of the Covid-19 crisis and the imminent ending of a number of government support measures – particularly the furlough scheme – means that it is important to take into account the timing of the survey. The analysis is based on an on-line survey of 334 IUK award holders conducted between 5th and 19th of June 2020 and in-depth interviews undertaken between 29th of June and 13th of July. The on-line survey was distributed by Innovate UK but individual respondents’ information has been treated as confidential to the research team. In-depth interviews were conducted by OMB Research Ltd.
Published: 9 September 2020
In light of concerns about persistently weak productivity levels in UK firms, this study focuses on the relationship between investment in R&D and innovation activity and how this relates to business growth and productivity. The context for our investigation is micro-enterprises, i.e. employing up to 9 employees. These enterprises dominate the business landscape and in Northern Ireland account for almost 20 per cent of the workforce while also playing an important development role in the economy.
Drawing on survey data of nearly 10,000 micro-enterprises in 3 countries: the UK, Ireland and the US, our analysis emphasises the importance of R&D – an investment activity that is often considered not suitable for small enterprises - in supporting the relationship between innovation and productivity.
Some of our main findings include:
• Despite resource and capability constraints within micro-enterprises, that curtail their ability to undertake R&D, we find that investing in R&D has a strong and positive effect on enhancing the contribution of innovation to productivity and turnover growth. This result is consistent throughout all of our estimations, even though the actual effect might be varied across different types of industry.
• In order to explain the importance of R&D investment, we also estimate the innovation function with two innovation outcomes: product and process innovation. Our results indicate that investing in R&D activity is important not only for product/service innovation, but also for process innovation.
• R&D investment undertaken inside the enterprise is positively associated with both product innovation and process innovation, however R&D acquired externally has no significant relationship with product innovation but is positively related to process innovation.
• In line with previous studies, we identify a significantly lower level of productivity for Northern Ireland micro-enterprises.
Published: 14 July 2020
Published: 17 June 2020
Enterprise Research Centre
Warwick Business School
University of Warwick
Coventry CV4 7AL
Enterprise Research Centre
Aston Business School
Birmingham B4 7ET
0121 204 5392