Many years ago, I was doing some writing and consulting work for the Organization for Economic Cooperation and Development (OECD) and was introduced to the concept of innovation vouchers, which are small grants to new companies to help defray the cost of innovation-related advances, such as getting a patent, developing a prototype, or tackling a new market. This tool works very well—it not only helps the assisted firms, but it also helps local service providers who gain new business and new skills along the way. I’ve written about the power of innovation vouchers on numerous past occasions, and still remain surprised (and saddened) that we don’t embrace this useful tool here in the US. At present, only a few locales in the US use this tool. Examples include Connecticut, Minnesota, New Mexico, and Rhode Island.
I’m glad that these states have seen the light, but they shouldn’t be alone. Innovation vouchers are a low cost tool that works. Don’t take my word for it—check out a new rigorous evaluation from the Netherlands which used randomized controlled trials to assess voucher program impacts on the performance of hundreds of firms over a 12 year period. We have had good evidence that vouchers work over the short term; these new results show important long-term impacts. When compared to a control group, the assisted firms were more likely to stay in business, to do significant R&D work, and to have slightly higher productivity rates. This is yet further evidence that these voucher tools work and that they need to be part of the toolbox for economic developers here in the US.