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Unpacking the social impact of R&D investments
Governments invest billions in R&D every year, but understanding whether that investment has a social impact turns out to be a hard question to answer
12 May 2026
At IGL, we sit at the intersection of research and policy, working with both researchers and policymakers to bridge the gap between evidence and policy decisions. Governments ask us difficult questions, and we work with them to unpack them, acting as knowledge brokers and translators between policy priorities and the research world. This means understanding what a policymaker actually means before going looking for evidence, a task which is not always as straightforward as it sounds.
A question one of our IGL Members, the UK Department for Science, Innovation and Technology (DSIT), recently asked us is: do R&D investments have a real social impact, and if so, what is it and how do we measure it?
The challenge: from general to granular
Measuring “social returns to R&D investment” can mean many things including wanting to know who benefits from these investments and how; what spillovers exist beyond economic growth; whose needs are being met and who is left out; and who gets to participate in R&D activities in the first place.
To unpack this, we worked with DSIT’s team through a series of practical exercises and discussions to break the question into smaller ones. We covered questions like: which paths to social impact mattered most to them? Which broader R&D goals beyond economic growth were they interested in (outcomes like health, wellbeing, sustainability, and equality)? What particular groups were they most interested in understanding the impact on? Were they concerned with who participates in R&D, and whether that participation is diverse? Or was the deeper concern about governance (who sets the agenda, who decides what gets funded, and whether that process could be more open)?
From there, we drilled into specific outcomes of interest and levels of analysis. This process took us from asking “what is the social return of R&D investment?” to something much more specific like:
- “What are the mechanisms through which innovation policy affects employment pathways, regional inequality, and the distribution of economic rewards?”
- “What is the causal link between national R&D funding and social outcomes beyond traditional economic metrics?”
Getting to this level of nuances of the questions and understanding what data could realistically be tapped into to answer them takes time but is, we think, one of the most important parts of what knowledge brokers like IGL do.Once we defined the specific areas of interest, we published a call for experimental evidence across the IGL Research Network. We got a great response: 24 researchers across the UK, US, and EU submitted 32 papers, tackling different angles of this question.
High social returns, but funding design and environment matter
Overall, the evidence that was submitted was encouraging. Estimates suggest £1 of R&D investment can generate between £5 and £20 in social value. Public R&D investment in health, energy, and science generates gross social returns of between 140% and 210%, and a single patent from a grant recipient can catalyse three additional inventions by others.
That said, the harder question remains who benefits from R&D investments, as evidence suggests that social returns do not distribute evenly. For instance, children from high-income families are significantly more likely to become inventors than equally talented children from low-income backgrounds – not because of ability, but because of exposure, networks, and access. At the firm level, evidence indicates that the profits from patents are often shared unevenly between firms and workers, and that innovation can in some cases sustain or widen the gender wage gap.
Funding and policy design also matter. Long-term, flexible grants encourage greater risk-taking and more exploratory research than short-term or tightly specified funding, with direct implications for the nature and social value of the research produced. Similarly, while specific innovation policies like business cluster initiatives, accelerators, or major public sector relocations can increase the concentration of economic activity, they do not automatically translate into broad productivity gains or net new employment. Hence, if public R&D investment systematically benefits some people more than others, that is something policymakers need to know and something they can act on.
The road ahead: new tools for new questions
When looking at R&D investment returns, most studies still focus on wages, firm growth, and patent counts as main outcomes, and there is still no agreed framework for capturing inclusion, mobility, or wellbeing beyond labour market outcomes. The governance of R&D priority-setting, who shapes the agenda and whose interests get reflected, also remains largely unexamined, and we think it is important to start exploring it and encourage more research on this.
Now more than ever we are seeing the need of quantifying and understanding these returns. There have been calls from major philanthropic funders like the Alfred P Sloan Foundation and Coefficient Giving launching a pop-up journal, calls for letters of inquiry, and NBER meetings. We are also seeing interest from different OECD governments in understanding the complexities around these questions and seeking more rigorous frameworks to evaluate their R&D portfolios.
New methodologies like machine learning, Natural Language Processing (NLP), and large-scale administrative data linkage are emerging and can be leveraged to answer this question from new perspectives. Applying these tools to understand the social (and not only economic) returns of R&D would allow us to move beyond aggregate estimates toward a more granular understanding of how R&D funding shapes social outcomes. It would also reframe the question from ¨does public R&D pay off?¨ to ¨who does it pay off for?¨ and ¨how can policy design ensure those benefits are more widely shared?¨.
If you are a researcher working on related questions or looking to work with policymakers, join the IGL Research Network!
If you are a policymaker wanting to get evidence and unpack difficult questions, reach out!
This review was produced as a rapid evidence response to a question from one of our policy partners, and we acknowledge it may not capture the full breadth of work out there. If you know of other relevant studies, please let us know! We would also like to acknowledge and thank all researchers who contributed to this review.