Technology Strategy Board Feasibility Study Projects
08/07/2013 Innovate UK
Independent report finds Feasibility Study funding encourages additional R&D spendAn independent report has shown that the Technology Strategy Board's Feasibility Study funding (small grants of on average £40k for short term projects to help businesses explore the technical feasibility of a new idea) provide good value, encouraging high tech small businesses to invest in research in new products and services.
The report, commissioned by the Technology Strategy Board and carried out by Warwick Economics and Development, examined the results of 325 Feasibility Study projects which were started in 2010 and 2011 and supported by the Technology Strategy Board to the tune of £13m , in seven different areas - Health and Medical, Biotechnology, Digital, Energy, Nanotechnologies, Nuclear Energy and Space.
The results were encouraging - the consultant found good evidence that the overall goal of Feasibility Study funding - encouraging more business investment in R&D, is being achieved. The report also found that the support tool is attracting and helping a very interesting group of business customers - young, fast growing, high tech, research intensive SMEs.
The report looked at whether the projects achieved their objectives, what business and other benefits the participating companies achieved and whether there were any other lessons for TSB. The contractor surveyed 228 participating businesses and another cohort of 212 "non-winners" as a control group. Over 90% of the winners believed the projects achieved their technical goals and just over 60% went on to invest in additional R&D. Other benefits cited by winners included increased profits, profile, value of business and in some cases ease of raising finance.
The "additionality" of the support was also examined. Over 70% of the supported businesses said that the Technology Strategy Board's support was essential for the delivery of their projects and another 27% say the funding speeded up the progress of the project. 85% of the "non winners" had not proceeded with their projects. A calculation of the cost benefit of the spending produced the result that £1 of grant had already produced £1.75 of additional R&D spending which will grow to £2.70 as the R&D projects continue over the next few years. There is also the potential for bigger GVA gains in future as the R&D is used in new products and services of up to £5.70 per £1 of grant.
The evaluation shows that feasibility studies projects are a good way of helping high tech SMEs to invest more in R&D in the near term and that they attract strongly growing businesses. A short summary of the findings is here.
David Evans is Senior Advisor Government Affairs for the Technology Strategy Board.
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