Subsidized R&D collaboration: The causal effect of innovation vouchers on innovation outcomes

We study the causal effect of subsidized R&D collaboration on external collaborations and innovation outcomes of small and medium-sized enterprises (SMEs). In particular, we make use of a randomized controlled trial to analyze the effect of a nationwide innovation voucher scheme in the United Kingdom that grants SMEs across all industries financial support of up to 5,000 GBP for engaging the services of experts, e.g., from universities, research institutes or IP advisors, when pursuing an innovation-related project. Our results show that the innovation voucher program has an immediate, short-term impact on the execution of these innovation projects with positive effects on product and service development, internal processes, and intellectual property protection. However, we also observe that these results fade out quite quickly, i.e., two years after the intervention many effects caused by the innovation voucher program have disappeared. Based on our results, we also provide some practical guidance to further improve the effectiveness of voucher programs.