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The economic impact of using NMS services on the private sector

26 Apr 2017
A report has recently been released by the UK government Department for Business, Energy & Industrial Strategy (BEIS) that examines the economic impact of public sector support for private sector innovation: The impact of public support for innovation on firm outcomes (BEIS Research Paper Number 3).

The study, performed by Frontier Economics, analysed the impact of direct public support through grants from Innovate UK and paid services from the three largest National Measurement System laboratories: LGC, NPL and NEL. It assessed the effect on survival, employment and turnover up to four years after support was received.

Their research found clear evidence that companies who use NMS services have higher survival rates than a control group of similar non-customers. Support from the NMS laboratories can increase employment by 10%–15% within two to four years; with an average cost to the state of £18k to £23k per job. The results for Innovate UK are very similar, but in this case there is also some evidence of turnover increasing four years after being awarded a grant.

This study, which showed both positive survival and employment effects, was commissioned by BEIS and Innovate UK and is the second phase of analysis of public sector support for innovation, building on previous research (Business innovation: effect of public support, 2014)
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