The impact of innovation support programmes on SME innovation in traditional manufacturing industries: an evaluation for seven EU regions

Rene Wintjes, D. Douglas (), J. Fairburn (), Hugo Hollanders and G. Pugh ()
Additional contact information
D. Douglas: Centre for Applied Business Research, Faculty of Business, Education and Law, Staffordshire University
J. Fairburn: Centre for Applied Business Research, Faculty of Business, Education and Law, Staffordshire University
G. Pugh: Centre for Applied Business Research, Faculty of Business, Education and Law, Staffordshire University

No 2014-033, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: This study investigates the impact of innovation support programmes on SME innovation in traditional manufacturing industries in seven EU regions. Recent literature identifying sources of potential government failure in innovation policy suggests that the effects of public support measures to increase private innovation may be disappointing. Our results are consistent with this hypothesis, yet also suggest a direction for policy reform to overcome government failure and, thereby, to increase the potential additionality of innovation support programmes. Innovation support programmes in the EU typically adopt a cream skimming selection strategy namely, programme managers systematically select firms on the basis of observable characteristics conducive to innovation. The econometric analysis of a new survey database reported in this paper suggests that cream skimming leads to firms being selected for programme participation that benefit less than would randomly selected firms. The policy corollary is that, subject to due diligence checking, allocation of innovation support by lottery should give rise to greater programme additionality than does the prevalent cream skimming approach. We conclude with some practical guidelines for allocation by lottery, which were developed for a recently launched innovation support programme for SMEs.

Keywords: innovation; SMEs; traditional manufacturing industry; public innovation support; government failure; evaluation (search for similar items in EconPapers)
JEL-codes: C14 C34 O32 O38 (search for similar items in EconPapers)
Date: 2014-04-30
New Economics Papers: this item is included in nep-cse, nep-eur, nep-ino, nep-knm, nep-sbm and nep-tid
References: View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2014033

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