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An econometric evaluation of Scottish Enterprise grant support to businesses

The report evaluates the impact of Scottish Enterprise grant support over the period 2009/10-2017/18 on businesses in Scotland. The grants reviewed are Regional Selective Assistance (RSA), R&D, SMART: Scotland, Environmental Aid, Proof of Concept grants, and Training Plus. The report evaluates the impact of grants on firm-level employment, turnover, and average turnover per employee (a proxy for productivity).

 Key Findings

  • The report finds that employment levels in businesses which receive grant support are, on average, higher than they otherwise would have been. For example, five years after receiving a grant, businesses had, on average, employed 69 more staff than they would have in the grant’s absence.
  • The most significant employment impacts are for those in receipt of Regional Selective Assistance (RSA) grants, where five years after receiving an RSA grant, businesses had on average employed 92 more staff than they would have in its absence.
  • There is less evidence to suggest that grants have had an impact upon turnover, turnover per employee, or on the growth of any outcome.
  • Employment effects appear most significant for small and medium sized grants, but there is no equivalent differential effect across grant sizes on turnover.
  • The scale of the grant is also found to be positively correlated with the number of jobs supported. There is some evidence of a small reduction on average turnover per worker of businesses that receive grants in between £250,000-£500,000 and also limited evidence of a small reduction in turnover per worker among RSA recipients (although the impact is generally only marginally statistically significant).
  • Although findings do not find consistent evidence of a statistically significant impact of grants on all outcomes, this does not mean that they have had no effect. Instead, the combination of data and methods used are unable or unsuitable to detect any impact either way.

Authors

Fraser of Allander Institute colour logo

The Fraser of Allander Institute (FAI) is a leading economy research institute based in the Department of Economics at the University of Strathclyde, Glasgow.