Ex Post Evaluation of the ERDF in Objectives 1 & 2 (2000-2006)

Work Package 6: support for enterprise and innovation in the 2000 to 2006 funding period

Support for enterprise and innovation is a key priority for EU cohesion policy. Between 2000 and 2006, almost €50 billion (more than a third of the European Regional Development Fund-ERDF) was spent in this area. This support was analysed in three different work packages (WP) of the ex post evaluation:

Work Package 6a: A survey of support for enterprise and innovation (2000 to 2006)

This evaluation reviewed enterprise and innovation support in each EU member country – in both national and cohesion policy.

Main findings:

  • SMEs were the main beneficiaries of ERDF support to enterprise, receiving 83% of the funding available for this area of investment. This is in line with national priorities given that enterprise policy focuses on SMEs in almost all EU countries.
  • Direct instruments (i.e. financial support, mostly grants but also loans and equity) are still the mainstay of support to enterprise and innovation (69% of total spend).
  • Emerging trends towards broader strategies with (i) a greater emphasis on innovation and (ii) a greater palette of instruments, including indirect, non-financial support (such as business services and clusters).
    • Final report pdf en
    • Terms of Reference pdf en

Work Package 6b: Key results from the 30 programmes spending most on enterprise (2000-2006)

This evaluation set out to measure the achievements of the programmes and assess the effectiveness of the different instruments.

Main findings:

  • Support for enterprise contributed to the creation of a significant number of new jobs, increased production, and improved productivity. The 30 programmes assisted 800,000 enterprises, mainly SMEs, leading to 625,000 gross new jobs. An estimated 1 million gross jobs were created by cohesion policy enterprise measures in total.
  • Monitoring needs to be improved. For example, the main intended effect of many instruments is greater productivity, but only 3 out of the 30 programmes collected data on this. Even for jobs created – an indicator planned by all the programmes – in 6 out of 30 cases figures were missing or judged unreliable. Programmes should determine which indicators most closely measure what they are trying to achieve and be consistent in collecting data.
  • From the palette of instruments available (e.g. grants, venture capital, loans, business services), one size does not fit all. Some regions showed an over-reliance on grants, where other instruments would have been more appropriate. Conversely, some investments (e.g. start-ups or early R&D) are too risky for financial engineering.
  • Policy makers should take a more proactive approach to implementation delays. This means enhancing administrative capacity to reduce unnecessary delay, but also accepting that some delay is inevitable and finding ways to manage this (eg getting an early start when setting up venture capital funds).
    • The 30 programmes covered by Work Package 6b pdf en
    • Final report pdf en
    • Executive summaries pdf de fr
    • Terms of Reference pdf en

Work Package 6c: Support for enterprise and innovation – econometric and counterfactual methods

This study compared enterprises in Eastern Germany which benefited from investment or research grants with similar, but unsupported, enterprises. There were two specific samples: the IAB Betriebspanel for enterprise support and Gefra's survey of enterprise R&D in Thuringia. To ensure robust results, various comparison methods were used (including propensity score matching, controlled difference in difference and instrumental variables).

Main findings:

  • Investment grants induced strong investment effects. Average public support of €8,000 per employee led to €11,000-12,000 of extra investment. This implies a leverage effect, where every euro of public money generates up to €1.5 of total investment.
  • R&D grants of €8,000 led to an additional €8,000 of investment. Although this 1-to-1 ratio is a little smaller than that for investment grants, it has an additional "spillover" benefit in terms of increased long term regional economic growth.
  • A rough calculation of the direct employment effect from investment grants was some 27,000 extra jobs. While positive, this is lower than figures derived from monitoring data, suggesting that the main impact of such support is increased investment and productivity, with job creation a secondary impact.
    • Final report pdf en
    • Executive summaries pdf defr
    • Terms of Reference pdf en

 

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