The study by Enterprise Research Centre (ERC) looked into research and development grants over a 13-year period and tracked the impact of grants totalling £8bn, which went to nearly 15,000 firms.

This figure included grants from Innovate UK and the Engineering and Physical Sciences Research Council (EPRSC).

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The main findings showed that across all grant recipients:

• employment grew by 6% in the short term and 23% in the longer term (after six years)
• turnover grew by 6% in the short-term, and 28% in the longer term
• an estimated 150,000 new jobs were created, many in highly skilled sectors, such as biotechnology, medical equipment, engineering, life sciences and high-tech manufacturing
• productivity grew by 6% in the longer term.

Speaking at the ERC Annual State of Small Business Britain Conference, Kevin Baughan, deputy chief executive of Innovate UK, said: “Innovate UK welcomes this latest research, which highlights the strong, positive impact that public research and innovation grants are having on UK businesses, and on the wider UK economy.

“This provides a strong foundation from which to build on our ambitions for the future.

“For example, enabling businesses to build more effectively on the world-class research base through the Industrial Strategy Challenge Fund, transforming existing industries and creating completely new ones and accelerating the deployment of patient capital by bringing venture capital match funding alongside Innovate UK grant funding.”