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Creative Credits: A randomized controlled industrial policy experiment

Creative Credits: A randomized controlled industrial policy experiment

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Published by Nesta
This report calls for more rigorous methods of evaluating business support schemes, following an experiment which used randomised control trials (RCTs) to assess the Creative Credits programme.
This report calls for more rigorous methods of evaluating business support schemes, following an experiment which used randomised control trials (RCTs) to assess the Creative Credits programme.

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Categories:Types, Research
Published by: Nesta on Jun 18, 2013
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11/05/2015

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Whether or not they recognise it in these terms, all frms have innovation processes, some

well developed, others not. the quality and the extent to which a frm’s innovation process

is embedded in its business practices determine its long–term competitive position.

there is a great deal of evidence for market (or system) failures in smes’ innovation

processes. most obviously, smes face diffculties in accessing external funding sources,

owing to information asymmetries between lenders and smes about their commercial

prospects.36

such failures may be compounded by behavioural failures on the part of the managers of

smes: inertia, excessive risk aversion and myopia may form signifcant barriers to changing

attitudes and routines which, it is argued, leads frms to make insuffcient investments

in innovation.37

together, these market, system and behavioural failures can act as

overwhelming constraints for smes when it comes to introducing novelty.

interventions such as Creative Credits aim to overcome these failures, by encouraging

collaboration with businesses in the creative industries. the aim is to test whether a one–

off injection of creativity can ‘nudge’ smes into being more innovative. the idea of nudging

innovation this way is prompted by theoretical arguments that creative businesses are less

prone to the behavioural failures discussed earlier, and empirical research which suggests

that frms which make greater use of services from the creative industries have superior

innovation performance.38

the ‘logic model’ for the Creative Credits scheme is shown in Figure 3.1. this links

the justifcation for public intervention in the relationship between smes and creative

businesses, the scheme’s objectives, the process by which the scheme operates, its

18 CREaTiVE CREDiTS a randomized controlled industrial policy experiment

immediate outputs and intended longer term outcomes.39

it also points to the Key

performance indicators which provide an indication of the effectiveness of the Creative

Credits scheme.

Figure 3.1: logic model for Creative Credits

Situation

Low level of
interaction
between
small businesses
and creative
service
providers

Motivation and
search barriers

Funding for
Creative
Credits

Partner
commitment

Inputs

Demand–led
Creative
Credits
with
random
allocation

Manchester
City Region
SMEs

Manchester
City Region
creative
service
providers

Outputs

Modality

Partners

Outcomes-impact

Awareness

Attitudes

Networks

Opinions

Innovation
collaboration

Commercial
impacts

Behaviour

Practices

Innovation

Innovation
collaboration

Short

Medium

Long

Assumptions

Creative Credits
will stimulate
linkages and
innovation

Environment

Contingency
factors may
influence
outputs in
determining
outcomes

the logic model describes how the award of a Creative Credit should help smes overcome

the barriers to innovation associated with fnancial barriers and behavioural failures: smes

develop new collaborations with a business partner in the creative industries, which lead to

innovations and improvements in frms’ longer term competitive positions. For the creative

partner, the Creative Credit represents a potentially valuable new business opportunity (the

scheme requires that creative businesses and smes have not previously worked with each

other) certainly in the short– and potentially the longer term too.

the fnal elements of the logic model relate to the specifcation of the scheme’s outputs

and their relationship to longer term outcomes, identifying possible contingent factors.

in the short term, the outputs from Creative Credits are measured primarily in terms of

increased levels of interactions between smes and creative businesses relative to what

would have prevailed absent the intervention – or in other words, network additionality.

in the longer term, we anticipate that this might generate three types of outcome: output

additionality, as innovations result from the Creative Credits projects which impact on sales

and growth; behavioural additionality, as organizational learning takes place and smes

learn to work with, and value more highly, creative inputs to innovation; and, perhaps,

further network additionality, as smes absorb the value of partnering for innovation. the

logic model highlights that such outcomes are contingent on other factors infuencing

frms’ innovation processes, however, and that these need to be controlled for, along with

market and other contextual factors, if the scheme is to be convincingly evaluated.

19 CREaTiVE CREDiTS a randomized controlled industrial policy experiment

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