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Chasing Targets based on R&D Spend is flawed

Over the last three decades at least, politicians, academics and business leaders have all enthusiastically embraced and promoted innovation as the key to economic success. This belief has been reflected in many policies, publications and programmes extolling the importance of innovation,
research and entrepreneurship as the keys to enabling growth at national, regional and global levels.

But when it comes to measuring the effectiveness of R&D investment, the focus has mainly been on measuring inputs rather than outputs, with ‘output’ metrics restricted to number of jobs created and very high level aggregate macro-economic estimates of gross value added - this focus on R&D inputs makes it hard to assess the relative impact of different interventions.

For example, if you spend £1 million developing a new bicycle and I spend £100k developing a new bicycle - if both are successful in the marketplace then by UK input measures (more R&D) you have done a better job whereas logic says from an output measure point of view, I have been more efficient and done a better job.

Using the Triple Chasm Framework, we intend to explore the relative effectiveness of different interventions based on outputs rather than just inputs. We hope to use this approach to guide priorities in national industry strategy.