SME competitiveness and innovativeness top economic policy agenda across Europe. Rightly so, SMEs are the backbone of our economies providing a lion's share of jobs and value creation. Helping them to perform better, smarter and greener will translate to strengthening coherent and sustainable communities. Therefore, governments spend huge amounts on supporting businesses to develop and innovate. ‘The problem is that we don’t really know what works and what doesn’t to increase innovation’ (Innovation Growth Lab, 2018). Lack of holistic data on innovation support effectiveness is an oft quoted barrier to optimal use of support funds. 

Our Policy Booklet on Integrating Design into Policy provided a series of recommendations to take into consideration when developing design support for SMEs. One of those encourages support providers and policymakers to evaluate a broad impact of support and iteratively improve support offer based on the data and feedback. 

As part of the User-Factor project, PDR has undertaken an in-depth evaluation of Scottish Enterprise (SE) ‘By Design’ grant support mechanism to explore the impact and customer experience of the scheme. 

The 'By Design' grant is a light-touch scheme that aims to attract new SMEs to SE and support them  in using design to develop new or improved products, services, and business processes. It takes the risk out of the first investment in design by providing a contribution of up to 70% of project costs (excluding VAT) to a maximum of £5,000. A wide range of design activities related to developing new products or services is eligible such as market research, packaging, concept development, prototyping, and planning work.

The study looked both at quantitative data through two surveys (among companies and design agencies providing support); and qualitative data through two co-creation workshops (with beneficiary businesses and Scottish Enterprise Innovation Advisors). The survey was sent to 456 companies who had received support during 2017-2019, with a response rate of 41%. The agency survey had a response rate of 25% among 114 supplier agencies. The purpose of the evaluation was to identify potential pressure points within the user experience in order to provide recommendations for improvement that will be prototyped by Scottish Enterprise.

The evaluation revealed that as a result of this support: 

  • 64% of companies launched a new product or service
  • 63% of companies expect to make over £100k over 3 years
  • 68% of companies collaborated further with a design agency
  • 71% increased their investment in design

Based on the surveys and workshops, a number of recommendations were made and a series of proposals will be prototyped in 2020 including: examples of how to write a design brief in order to commission design services; a simple visualisation of the user journey to communicate the process more effectively to potential applicants, a toolkit for companies to work through with the design agency in order to introduce design-driven innovation, and implementing a structured follow-on process to support innovation active companies.

You can download the full report here.