Introducing our Impact Management Framework

A guest article by Dan Hodges, Deputy Director for Strategy, Innovate UK.

A guest article by Dan Hodges, Deputy Director for Strategy, Innovate UK

Impact.

It’s a deceptively simple word that is surprisingly hard to define.

Impact is a term that we all use a lot. To the point that sometimes it can feel like a buzzword, trotted out for effect: “This initiative has real impact!” (The word ‘real’ implying that it is often rather more hoped for than nailed on.)

For Innovate UK, creating impact is integral to our work as the country’s innovation agency. We make sure that everything we do is focused on driving productivity and sustainable economic growth. We do this by supporting businesses to develop and realise the potential of new ideas.

Supporting innovation is fantastically exciting. Through our work, we can help unlock the potential that our country of James Watt and Ada Lovelace – or, more recently, Dame Sarah Gilbert – contains. If we are to tackle society’s great challenges, such as reaching net zero carbon emissions or helping our ageing population to live well for longer, innovation will be a big part of the solution.

What is impact?

Let’s start with what impact is not. Funding a business is not impact. Completion of a project is also not impact.

Impact begins when our support (whether advice, networking and funding for an R&D project, innovation infrastructure through our Catapults or business support through Innovate UK EDGE) produces economic and societal benefit for the business, the sector, the place, or the users of the innovation being developed.

Impact could be made through a business attracting follow-on private investment which allows them to scale and create new jobs. It could be through an increase in a company’s turnover or headcount. It could also be their innovation having a positive impact on our society or environment.

In 2020, the Small Business Research Initiative (SBRI) programme funded Hygiene Pro Clean to develop a system to disinfect ambulances more quickly – a massive issue during the pandemic.

Their system resulted in an 86% reduction in time taken to do the job, and an 82% reduction in costs. It therefore increased the time that ambulances could be out on the road and, in turn, helped an innovative business to grow. While saving lives.

Now, that’s impact.

How we know when impact comes from Innovate UK support

While Hygiene Pro Clean is a clear example of innovation support delivering impact, can we be confident that this is “real” impact? Would it have happened if SBRI didn’t exist?

We of course cannot observe what might have happened without SBRI funding. However, in this instance, given the context of the pandemic and the need to broker relationships, we are confident that SBRI funding provided the catalyst for this change.

To build a clearer picture as to whether the impacts we observe are real, our evaluations compare companies supported by Innovate UK with similar ones without support.  It is by looking at large numbers of these, and comparing the difference in performance, that we gain statistical confidence that the impact would not have happened without Innovate UK.

This is what much of our impact statistics are setting out: the change in performance that would not have occurred without us. Our recent evaluation of SBRI found that the benefits to the businesses who were awarded funding, amounted to up to four times the cost of the public sector investment.

You may have seen us summarise our impact and return on investment as an average impact from all our published evaluations. However, this is a low-resolution way of looking at things. Summary statements of return on investment obviously become more complex as a portfolio of support diversifies beyond funding. A high-resolution approach, looking in detail at specific projects and programmes, and across all of our activities in a consistent way, is more beneficial.

That is why we conduct programme-level evaluations, and why we look at studies across our entire portfolio to understand the effect of Innovate UK on key outcomes such as turnover and employment. These studies back up what our evaluations have told us: that companies supported by Innovate UK perform better, on average, as a result of that support.

A lot better.

One study found that companies supported by Innovate UK grew turnover by an average of over £5-10 million, and employment by 30-40 employees, 2-4 years after receiving support.

Another found turnover and employment both increasing by around 25% in the medium term, around six years following support.

Our team is now building on this work and looking to understand our impact at the next level of detail, with a new way of working called the Impact Management Framework.

It works in four steps:

  1. Planning and design. Build impact into the design of a programme, defining the need for action and the impact it intends to have on the UK economy and society.
  2. Collect data. This includes metrics that are the same for everyone, alongside others that apply to particular programmes. Data is collected throughout a project’s lifespan, and continues after it is completed. Much of the impact we are aiming for happens following rather than during our period of support.
  3. Monitoring, reporting and evaluation. We look in detail at the data and understand what it is telling us. This could mean producing a performance report or a more detailed evaluation.
  4. Innovating our approach. This is perhaps the most important step. Take all of the learnings out of a project to inform future decisions about where and how to support innovation in the future.

We do not get evaluation of impact right every time. That’s impossible when we are supporting businesses which, by their very nature, are pushing the envelope in so many ways. But we are innovating our approach and committed to improving with every new project and programme we set up.

When it comes to considering impact, one size definitely does not fit all. One project could bring economic benefits to an area of deprivation; another could help revolutionise the way we travel.

Through clear goals, and a robust way of making decisions and evaluating results, we give ourselves the best chance of backing many, many more of the UK’s best, most innovative, businesses who will go on to enhance productivity, bringing jobs, growth and prosperity to all parts of the UK.

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