European innovation agencies are running randomised experiments to improve their support schemes

By Hugo Cuello on Wednesday, 11 December 2019.

Innosup kick off meeting in Brussels

A new wave of policy experimentation is underway across the EU. The European Commission is funding 13 projects led by agencies from 8 different European countries who have been selected to trial new innovation support programmes. Last week, they all met in Brussels for the kick-off meeting. The Innovation Growth Lab (IGL) will support the development of the experiments to help them achieve greater results and to share their findings with a wider audience.

Every year, European governments spend approximately €150 billion to support businesses, innovators and entrepreneurs through a wide range of mechanisms. However, European countries are still suffering from economic stagnation and increasing productivity gaps. There is very little evidence on how effective these programmes are and if they really help entrepreneurs and SMEs grow sustainably.

The good news is that every day, more politicians and policymakers across the continent are recognising the value of experimentation to increase the efficiency of investment programmes. During the Eurogroup meeting in November, our director Albert Bravo-Biosca presented in front of the 19 Eurozone finance ministers and the President of the ECB on how policy experimentation can increase the impact of public investments in innovation. This political support for experimentation comes hand in hand with concrete policies to fund Randomised Controlled Trials (RCTs).

IGL has called for a pilot European experimentation fund for innovation and growth since 2013 when we wrote the first proposal. Therefore, we couldn't have been more pleased when the European Commission took up this idea and launched the first call to fund experimental trials on innovation support programmes, as part of the Horizon 2020 Work Programme 2018-2020. 

The programme, officially called INNOSUP-6, funds experimental pilot projects undertaken by regional and national agencies that run innovation support programmes for SMEs and start-ups. The call is aimed at innovation agencies who want to design new or improved policy schemes supporting SME innovation, and test these using RCTs. They provide small grants up to €60,000 for small-scale experimental pilot projects, and up to €500,000 for large-scale experiments to test new and scalable SME innovation support schemes.

Why is this crucial for the future of European innovation? In words of the European Commission, “with new business models and technologies emerging, it is more important than ever that innovation support agencies constantly adapt and innovate in the way that they provide support. Yet, innovation support agencies rarely engage in policy experimentation - for lack of funds, time pressure to deliver new support, and the fear of a backlash against 'money wasting'. At the same time, there is a linked problem that evidence on the effectiveness of both existing and proposed new support mechanisms is limited and inconclusive”.

In short, the EU institutions acknowledge a demand to provide innovative and up-to-date support programmes, but agencies lack the incentives to experiment, building a troubling deficit of convincing evidence on what works. This programme aims to overcome some of these barriers and provide regional and national agencies in Europe with financial and technical support to experiment.

Projects have now been selected, and we’ll see randomised experiments across the entire continent soon. Some selected innovation agencies are more familiar with experimentation, including those we’ve been supporting for some years now, such as  FFG -the Austrian Innovation Agency-, and Innovate UK. But for most of them, this project is the first time they have ever run a randomised experiment.  

In total, the European Commission is funding 13 experiments, involving several agencies. Most projects are organised by a single agency, but others cross different regions and countries. For the 13 projects, 3 are lead from Austria; 2 from the UK, Spain and Italy; and 1 each from Lithuania, Greece, Poland and Germany. 

Some of them are national agencies such as the Lithuanian Innovation Center, the Knowledge Transfer Network (KTN) in the UK or the Business and Cultural Development Centre (KEPA) in Greece. But some regional agencies are also involved, such as Torino Wireless Foundation from Piedmont in Italy or the Institute for Business Competitiveness (ICE) of Castilla y León in Spain.

Agencies have presented cross-cutting ideas for evaluation. Some projects are testing innovation methods based on user design and co-creation. Others try to improve technology adoption, building innovation capacities of SMEs or enable them to improve the access to funding. You can access all the information about the call and the list of the funded projects. They have met in Brussels for the kick-off meeting where they presented their projects and get some peer-learning opportunities.  

Furthermore, IGL has been commissioned by the EU to provide feedback to the projects, help them deliver successful trials and achieve wider benefits that would enable policymakers to learn from the projects and be inspired to adopt more policy experimentation.

Most of the trials will finish in 2021, but the hard work starts now. Projects will need to design trials in a way that provides robust results but also manage to implement them successfully and learn the necessary lessons to make policy experimentation a reality in Europe. Stay tuned to learn more about the selected trials and how IGL is helping them to succeed in this difficult but crucial task.