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A new source of funding for trials

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Last month Meg Kaufman wrote a blog about the most common barriers we have encountered when trying to pilot and test innovative policies. They fall into four categories: funding, ethical concerns, fear of failure, and lack of scale.

Given this, it’s great news that the government is addressing one of these barriers with new funding to ‘test innovative ways of encouraging SMEs to adopt existing technologies and business practices that boost productivity’.

There are a number of market failures which can mean it’s challenging for SMEs to adopt practices which could improve their performance. The people who run these businesses tend to be very busy. They may not have the time to stay in touch with the latest in digital and business practices to improve productivity. To make matters worse, they may find themselves the frequent target of marketing for advice that can increase profitability with no easy way to judge whether the investment of time or money in a new practice is worth the risk.

For example, mapping a complex supply chain can help managers identify where digitisation could reduce costs and risk. But doing it will cost money and time in the short term. There may be disruption. And the benefits are uncertain, and may not be clear in the current business cycle. It is easy to see why managers choose to stick with an existing system which they know works.

Evidence shows that we can improve UK productivity by increasing the adoption of management practices and tried and tested technologies. Finding ways to help them grasp the opportunity offered by new technology and business practices could help the government address the primary goal of the Industrial Strategy and improve productivity across the economy.

Robust evaluation is at the centre of the Business Basics fund that will help inform future policy making, as is the sharing of the findings. The findings will be a valuable addition to the evidence base on business support.

A share of £2 million is available under the first call. The fund closes for applications on 4 September. Details are on the application pages of the Innovation Funding Service website:

Anyone interested can sign up for a webinar on 9 August to find out more about the fund or contact