Despite the importance of innovation and high-growth entrepreneurship for economic growth and the billions spent by governments each year, there are still many open questions on what policies work in this field.
Many of the programmes seek to encourage businesses to develop new products and processes, yet surprisingly little R&D is undertaken in the policy approaches adopted.
At IGL we have long argued for a more experimental approach to policymaking. That is why, last year, we published a guide to running randomised controlled trials (RCTs, or trials in short) - the cornerstone method of policy experimentation - in the field of innovation, entrepreneurship and business growth.
This year, we are expanding this work by creating an online toolkit on experimentation. The toolkit presents much of the information provided in the guide on running RCTs, but goes well beyond to include:
Want to learn more about this work? We have put together a 'Frequently Asked Questions' about experimentation below:
It boils down to two things. First, to try out new ways to achieve policy objectives in innovation and entrepreneurship: oftentimes we find that the same types of policies are implemented, and that there hasn’t been as much change as there should have been in the past decades.
We advocate an approach that does not assume we already know the answers to difficult policy questions, and is willing to try out new ideas - even if that means sometimes ‘failing’. Others at Nesta have been working on helping organisations change their mindset to allow for more experimentation and failure.
But if this approach is to succeed, we need to have in place a method for finding out whether these new attempts (as well as all other programmes) do work. That is why our second recommendation is that we use trials (in conjunction with a number of other methods) to find out what really works, whether this be testing the value of entire programmes or small tweaks to improve one element of delivery.
Many policy programmes undergo an evaluation - yet these aren’t always as helpful as they should. Oftentimes, if someone is skeptical about the economic value of a programme, a normal evaluation will not make them change their mind - since there are always reasons to believe something else is going on (e.g. all firms were doing better because of the economy, not the programme - or the participants were fundamentally different in some way).
Trials help you address this by allowing you to compare two groups that should be identical in all but the reception of the treatment. This addresses a number of biases, such as ‘selection bias’ (the idea that the reason your firms or entrepreneurs ended up in the programme is because they are better and more motivated than their counterparts not in the programme), or issues around timing (for instance, when discerning the effect of a programme from a general improvement in conditions in the economy that helped all firms), among others.
Trials are currently under-used in the field of innovation and entrepreneurship. While we know there are a number of reasons for this, we wanted to create a resource not only to explain what trials are, but also to provide policy-makers with ideas for experimentation in their own organisation. This is why the toolkit will have an entire section dedicated to helping people understand ‘when’ in the policy process they can make use of trials, and what they might get out of them.
Moreover, while the concept behind trials is simple, careful planning is required to ensure trials are used effectively. The toolkit was developed to discuss methodological considerations for policymakers, practitioners and researchers involved in RCTs, but also more practical and delivery-oriented information.
The toolkit will officially be launched at IGL’s Global Conference on June 13-14; it is thought of as a living resource, which will be updated with new content and answers to Frequently Asked Questions.
The conference will also be an opportunity to discuss trials and experimentation, as well as new trends and cutting-edge ideas in innovation and entrepreneurship more generally, together with senior policy-makers and practitioners from innovation agencies around the world.