Creative Credits B2B Innovation Vouchers Creative Credits – What have we learnt from the UK experience?

Professor Stephen Roper & Dr Judy Scully

Introducing Creative Credits

SMEs tend to be reluctant to partner with creative service providers for innovation

Creative Credits are B2B innovation vouchers to encourage SMEs to innovate in partnership with creative service providers (e.g. designers)

Creative Credits have a face value of £4,000. The SME is required to add a further £1,000 to support the project.

150 Creative Credits were distributed in Manchester between October 2009 and November 2010 with very light-touch brokerage using an on-line gallery of creative service firms

Logic model for Creative Credits

The Creative Credits policy experiment

Usually policy evaluation is ex post. Here a different and novel approach.

Evaluation designed as small scale, experimental evaluation study based on randomised control trial methodology.

In fact ‘RCT+’ evaluation methodology has three key features: : Randomised allocation of firms to treatment and control groups – lottery

based allocation of Creative Credits Longitudinal data collection strategy, allowing the longer term as well as

short-term impacts to be assessed, Mixed-methods empirical approach, combining qualitative interviews with

quantitative survey techniques.

Collecting evaluation data – theory

Collecting evaluation data – in practice Four surveys over two years so

attrition was a problem – used some small financial incentives

By survey 4. Treatment -78 per cent response (n=117), control group 52.2 per cent (n= 157)

Clearly bias between groups but comparison of baseline characteristics suggests NO systematic bias within groups

Longitudinal sample therefore considered ‘representative’

Key results 1: Project additionality

Evidence of a high level of project additionality - firms receiving a Creative Credit were 78 per cent more likely to undertake the proposed project

This result is very similar to that obtained in the Dutch innovation voucher pilot project

Typical comments were: “…we couldn’t have afforded it … we wouldn’t have done it. It’s made a real

difference to us from that point of view.”

“… it’s allowed us to accelerate things and it’s perhaps made me focus on it rather than put things off. So it’s got things moving quicker than if I’d been left to my own devices.”

Key results 2: Output additionality

Strong evidence of short-term output additionality in terms of increased innovation. But effect short lived. Weak learning effects?

Longer term sales gains from Creative Credits projects though – average benefits last 2.5 years

But … there was widespread evidence of a recession effect:

‘We are still experiencing a depressed market due to the recession, but our short term future looks better and I expect to see significant up-turn in 2012. As such our new products have not had an easy start in life, but we are happy with their development and remain optimistic for their future’.

Key results 3: Behavioural effects

Little evidence of significant behavioural effectsControl/treatment firms equally likely to innovate in future

three yearsAlso equally likely to co-operate with creatives

But considerable evidence (self-reported) of gains in confidence, innovative capability etc. in treatment group

One SME commented: ‘you can’t just sit back and just do things the same. We’re now thinking about building a French web site and a German web site’. Similarly, ‘you cannot move forward if you don’t take the risk’.

Qualitative Insights- from 20 working relationships Out of 20 pairs in the qualitative interviews (stage4) 9 SMEs reported

failure Poor communication

Poor coordination

Economic climate

Brokerage not robust enough to support selection

One consequence of these communication and coordination difficulties – and the tensions they created in some of the SME-creative relationships – was a lack of organisational learning and the knowledge was not embedded

In particular, a number of SMEs made suggestions as to how NESTA could have provided a more active matching and brokerage function between SMEs and their creative partners. :

‘…we would have got loads more value if they went down a completely different route that was more online focused. Now, I think I would have made better decisions if I had have had almost somebody from NESTA to bounce ideas off first rather than me ... because it was quite limited and I think, perhaps, even if there was some sort of almost a network, an open day so - that everyone that was accepted onto the programme could actually go and meet a few of these other companies … I think that would have been a lot better. It would have meant I would get heaps more out of the project’. ( SME)

Qualitative Behavioural Additionality Behavioural Additionality

Despite the following loose examples of behaviour change, in Survey 4 there is limited evidence of behavioural change:

Mindset shift: One SME spoke of how the Creative Credits partner enabled a mindset shift in terms of working with professional agencies and freelancers and so “we’ve actually started to work with an agency” (W2S11).

Thinking differently: Another SME explained how their creative partner encourages them to think about their products and bring three websites together and “This has changed the marketing system from a “Hi we’re here” to a “Hi we’re here and have a look’” (W1S6).

Operational benefits: A third SME noticed that co-operation improved through a close working relationship on innovation. This involved them being offered discounted marketing at a favourable rate as well as being given some shared office space (W1S6).

Sales and promotions: A fourth SME said that working with the creative credit partner sales team has led to new products on Amazon and orders coming in daily as well as new products. They intend to work with their creative partner again and associate the success of the new mascot design with the launch of their new company (W2S8).

11 Success Stories in the Qualitative In a good many cases – unsurprisingly, given the web-based nature of many of the projects

SMEs felt that their creative partners had portrayed them in a more positive and engaging way online to their customers.

One firm commented: ‘certainly it has improved the image and it’s improved the response we’re getting, people are getting in touch with us which they weren’t before’ (SME).

‘it’s changed the way that people perceive [us] because instead of looking like a clacky old website that I was slightly embarrassed by, it looked like I wanted it to look, because the person that designed it originally, the two guys that were involved from the very start five years ago, and did the update two and a half years ago, were not the ones I should have used. I should have been using a professional organisation’ (SME)

For other SMEs the Creative Credits projects had resulted in a more unified marketing message:

‘The main impact we’ve had is the little mascot man, the little robot, because he also appears on the hard copy material that we produce as well’ (SME).

Summing up … Creative Credits proved very popular with SMEs and creative

service providers with high application rates (6 times over subscribed)

Short term additionality was good but longer-term and behavioural effects proved weaker

Why? Timing particularly difficult but also possibly matches could have been stronger. One of a number of firms commented: ‘Unfortunately the wrong choice of creative partner was made - the

creative credits scheme was in no way at fault. The partner chosen fell way below the standard expected and their performance bore no relation to the picture painted at initial meetings’.

Implementation lessons Do consider brokerage carefully. Getting the matches right is crucial. This

was under-estimated and we had contrasting outcomes:

‘… Unfortunately the wrong choice of creative partner was made’.‘Our experience with our creative partner was very positive … ‘ ‘We … feel there should have been more 'vetting' of the creatives involved’.

And don’t implement schemes in recessions!:‘… its difficult to know whether the Creative Credit has helped deflect further shrinkage in trade than would have been suffered and what impact it would have had in normal circumstances’.

Follow-up material

‘A guide to Creative Credits’ – provides a detailed overview of the programme

Available at: http://www.nesta.org.uk/assets/features/guide_to_creative_credits

‘Creating innovation in SMEs’ - an overview of the interim evaluation resultsAvailable at: http://www.nesta.org.uk/publications/reports/assets/features/creating_innovation_in_smes

And, final report to come in a few weeks