1. Expert Group on In-depth Mutual Learning between National Policy Makers R&D Grants Challenges Presentation Professor Ammon Salter 30 June 2015

2. Why use this instrument? Common tool among MS –offers a means to directly shape innovative efforts of private firms Broad range of schemes in operation –with a shift towards more integrated policy mixes (grants, loans, PPPs…) and higher degree of skepticism about effectiveness Tend to be focused on pre-competitive, industrial R&D or collaboration Underpinning rationales –Market failure –System failure

3. Challenges for design Should the grant scheme be targeted? Mixed use of targeted schemes across MS Young, innovative firms, emerging sectors… How should the selection process be organized? –One stage, multiple stages… Who judges? –Internal vs. external expertise

4. Operational challenges How do you develop an entrepreneurial mindset in funding agency? –Overcoming a ‘public sector mentality’ to grants –Delegated agency (UK, Finland) - may encourage more ‘risk- taking’ outside the civil service What is the productive ‘life’ of a grant scheme? –Strong inertia in grant schemes –Overcoming ‘system failures’ requires proactive design efforts

5. Evaluation challenges How do you track or follow the funded and unfunded projects? How do you commission an ‘effective’ evaluation? How do you ensure that the programmes do not suffer from ‘mission creep’? How can you measure the effect of a grant, if the grant is small relative to the outcome expected? Should evaluations target average performance or hunt for a few, ‘big wins’?

6. Evaluation challenges How do we really know that our grants made a difference? How can we build more robust and valid evaluations to prove it? –Drawing on the ‘identification revolution’ –Matching - Comparison on funding vs. non-funded entities of similar type – ‘dosage’ effects –‘Near miss’ cases analysis –Randomized trials

7. Questions In designing, implementing and/or evaluating R&D grants, what was some of the most pressing challenges you were faced with, and how did you overcome them? What are the persistent challenges that you continue to face? Which other countries may face similar challenges?