Measuring the Effects of Public Support Schemes on Firms' Innovation Activities. Survey Evidence from Austria

Abstract

Abstract:This paper discusses conceptual frameworks for measuring the effects of innovation policy and begins with applying conventional descriptive methods to explore how firms rate and rank the merits of public intervention. Based on survey data from some 1200 Austrian firms we then challenge the hypothetical survey question ("What would you have done if public support was denied?") by comparing the respective answers with changes that actually occurred when public assistance was refused. This is a contribution to the ongoing literature as is the attempt to relate any of the observed additionalities to the firms' characteristics, their perceived barriers to innovation and the degree they make use of the public support system. The effects of policy interventions prove to be cumulative in a dual sense. On the one hand, our results confirm the well-known notion that large firms make the best use of funds. On the other hand, substantial changes in the way a company undertakes R&D&I-related activities appear to only result from multiple policy interventions of different kinds. While supported firms tend to immediately increase their resources devoted to innovation projects, the result-based concepts of additionality only come into effect once a threshold level of intervention has been reached. Acknowledging that a public innovation support system already incentivises potential beneficiaries to change their innovation-related behaviour, and that eventual success in terms of outcomes does not arise from some discrete support measure, but from the synergies of multiple policy action, we conclude that future work should focus more on the evaluation of portfolios of programmes and their interactions. JEL: C25, C42, H50, O31

The impact of R&D subsidies on R&D employment composition

“…Falk (2007) finds that scope additionalities arise, in the form of more cooperation or more challenging R&D projects, when multiple policy interventions or continuous public support is provided. Autio et al (2008) show that collaborative R&D programs, by enhancing the identification of subsidized firms with a community of practice, enhance learning outcomes in these firms.…”

“…From the perspective of behavioural additionality scope effects are also an important dimension of the impact of R&D subsidies (Falk, 2007). The existence of scope effects means that new objectives are added to projects, including new research areas that are beyond the key competences of firms and that involve greater difficulties and new technology or research fields (Falk, 2007;Georghiu et., al., 2004;Wanzenböck et al, 2013).…”

“…The existence of scope effects means that new objectives are added to projects, including new research areas that are beyond the key competences of firms and that involve greater difficulties and new technology or research fields (Falk, 2007;Georghiu et., al., 2004;Wanzenböck et al, 2013). If scope additionality takes place the search for knowledge leads to a firm enlarging its previous knowledge base, exploring new trajectories and different technology and research fields.…”

“…This heterogeneity suggests that a firm's reaction to public intervention may be conditioned by specific characteristics that influence the innovation process. Several papers analyse the impact of R&D subsidies on firms according to their size (Falk, 2007;González and Pazó, 2008;Lach, 2002;Ösçelik and Taymaz, 2008). In this paper, the possible existence of differences attributable to firm size is also analysed.…”

The Use of Behavioural Additionality in Innovation Policy-Making

“…One example here is Falk (2007) who defines BA as a broad category that includes scope and acceleration additionality (i.e. if the measure encourages the firms to conduct their projects in a bigger scope and faster than it would have been) as well as cognitive capacity additionality (i.e.…”