Innovation policy: beyond “on the one hand, on the other hand”
Mark Twain once mused about two sorts of ignorance: “things you don’t know”, and “things you know for sure that just ain’t so”. When it comes to innovation policy, both types of ignorance are in abundant supply.
Governments cleave to what Cambridge’s Alan Hughes called “cargo cult innovation policy”: trying to copy Silicon Valley, and ending up with a bastardised version that doesn’t work. Manchester’s Kieron Flanagan recently found plenty of innovation myths alive and well at the 2014 Labour Party conference, from an obsession with small businesses to an exaggerated faith in the power of public procurement to drive innovation.
Nesta has done its bit to put some of these innovation myths to rest, most recently in the epic Compendium of Evidence on Innovation Policy we published, working with an international group of researchers led by the University of Manchester. One of the notable things about this review is how unclear the evidence for many common innovation policies, from fostering clusters to R&D tax credits, really is.
But it’s not enough to tell policymakers what we don’t know. There’s nothing more annoying than turning to someone for advice and getting nothing but equivocation – what Alan Clark called “on the one hand, on the other hand balls”.
This is why Nesta is setting up a major new initiative to improve our understanding of what works when it comes to innovation and growth policy. It’s called the Innovation Growth Lab (IGL), and it is a partnership with the Kauffman Foundation of the US and a number of international partners*.
The purpose of the IGL is to run and support randomised controlled trials (RCTs) of policies intended to promote innovation and economic growth. The benefit of using RCTs to test government policies has been well rehearsed – read this or this by Ben Goldacre if you need convincing. Our hope is that as well as providing rigorous evidence for what works, these RCTs will also help us understand why it works, and make it easier to design better policies in the future.
The first grants, which we’re announcing today, look at interventions including business incubators, entrepreneurial mentoring and university tech transfer. They take place around the world, including the UK and US and countries from Argentina to India to Russia.
We hope that the IGL will make a major contribution to the evidence base for innovation policy in the future – and that in due course those who advise policymakers will be able to do better than just equivocating, or worse still, being wrong.
* Our partners are the Australian Department of Industry, the Danish Business Authority, the Ministry of Economic Affairs of the Netherlands, the Swedish Agency for Growth Analysis, and, here in the UK, Innovate UK and the Department for Business, Innovation and Skills.