Measuring the distribution of benefits of research and innovation
To support government spending in research and innovation (R&I), it is important to be able to measure the benefits that R&I bring to the UK.
Economic analyses offer a compelling case for the benefits that research and innovation (R&I) can deliver, but R&I also offers numerous benefits that are either not easily monetised or not well understood. These include benefits to culture, public engagement, social cohesion and the environment.
As the UK government works towards its commitment to increase investment in research and development to 2.4 per cent of gross domestic product (GDP) by 2027, there is a need for better evidence to inform decisions about how and where that investment is made.
The National Academies have recognised the need to better understand the range of benefits that research and innovation (R&I) bring to the UK and how best to measure them, in order to support government spending in this area.
RAND Europe was commissioned by the National Academies to examine the evidence on the range of benefits from R&I, including how they are measured and the gaps in the evidence. The researchers’ goal was to provide an overview of the existing evidence in the following areas:
- The range of benefits of research and innovation, such as economic benefits, health and wellbeing, sustainability, and social and cultural enrichment.
- How such benefits of R&I are currently assessed or measured in the UK and the limitations of these approaches.
- The distribution of benefits across the UK, across population, geography, sector and over time.
- Alternative approaches that have been developed in other countries or contexts.
This study was based on a rapid evidence assessment of the existing literature on the benefits from R&I. To complement the literature review, the researchers interviewed 11 key sector experts. Based on the evidence from the literature review and interviews, the researchers developed a conceptual framework to classify the range and nature of benefits from R&I.
What are the benefits of R&I?
- Existing evidence shows significant economic returns from investing in research and development (R&D), estimated to be in the region of 20–30%, which equates to 20p-30p returns on every pound invested. However, comparable estimates are not available for R&I as more widely conceptualised. There may be even greater benefits of R&I across society than these economic R&D estimates suggest, including benefits on culture, public engagement, social cohesion and environment; however it is hard to measure this by economic analysis.
- There is also evidence that public sector investment in R&D encourages further private sector investment.
How are the benefits of R&I currently measured?
- The majority of evaluations of the benefits from R&I are dominated by only a few methods, most notably productivity-based economic analyses, case studies and portfolio-specific evaluations.
- The potential of some key datasets are however not being realised, with analyses often performed in limited ways and funders typically not sharing data to support cross-disciplinary analysis. Such limitations partly reflect an overall lack of resources in evaluation.
What evidence exists on the distribution of impacts?
- There is limited evidence on the distribution of impacts of R&I by region, population groups or over time, though there are examples from specific sectors which can be utilised for different contexts.
- Longitudinal analyses are also limited, with most providing only a ‘snapshot’ of the benefits from R&I investment, rather than acknowledging how these benefits may emerge and develop over time.
- Evidence on the commercial benefits of R&I mainly cover geographic distribution, using a range of approaches.
How can we improve the evidence base and build on innovative practice?
- Examples of novel practices, alongside a number of underutilised datasets both within and outside of the area of R&I, could help to develop a more comprehensive picture of the benefits of R&I in the UK.
- The key to achieving this would be increased openness and sharing of data across the R&I sphere, alongside consistent funding to support more effective, holistic and innovative practice in evaluation.