Comment by Mel Abraham, Impact & Business Insight Manager at Energy Systems Catapult.

In a world racing toward Net Zero, innovation is key – and the Catapult is playing a pivotal role in helping UK small and medium-sized enterprises (SMEs) lead the charge. A new independent report by SQW, using a robust difference-in-differences methodology, quantitatively assesses the impact of the Catapult’s support on SME growth. The findings offer compelling insights into how targeted innovation support can catalyse investment and asset growth.

How does the Catapult support SMEs?

We work with innovators to help them: test, trial and scale new products and services; understand their route to market and position in the value chain; secure customers; attract investment; and grow their businesses – drawing on a range of capabilities, tools as well as test and demonstration environments. Recent case studies explaining more in-depth examples of the support the Catapult gives include:

• LiNa Energy supported through the Innovating for Transport & Energy Systems programme in India
• Cognition Energy given business model support
• Rendesco who particularly benefited from IP support, amongst a wider programme of support

The study: Measuring impact

The study analysed 237 SMEs supported by the Catapult since 2018, comparing them to two groups: statistically matched firms from the wider business population (‘matched’), and unsuccessful applicants to Catapult programmes & those receiving only light-touch support (‘comparison’). The outcome metrics examined were:

• ability to attract external finance,
• total assets,
• employment and
• turnover.

Key findings:

• External finance: Catapult-supported SMEs were significantly more likely to secure external funding. Compared to Matched firms, they were 12% more likely to attract investment, and 38% more likely than Comparison SMEs. In monetary terms, they raised significantly more than they would have without support:  up to 2 times more than the Matched group; and over 16 times more than the Comparison group. This means that of the £560m raised by the SMEs the Catapult has supported since 2018, over £200m is attributable to support by the Catapult.(Catapult’s calculations based on the findings of the report).
• Total assets: This financial boost translated into tangible growth. Beneficiaries’ total assets were 43–55% higher than their predicted counterfactual path, confirming that the Catapult’s support helps firms build a stronger foundation for future growth.
• Employment and turnover: The picture here is more nuanced. While SMEs supported by the Catapult continue to grow employment and turnover following support, overall the analysis did not find that employment or turnover grew faster than the counterfactual groups. However, this may be due to the short timeframe of available data—most firms were supported from 2021 onwards, limiting the ability to observe long-term effects. We also hypothesise that some supported SMEs are early-stage, focusing on R&D and product development rather than immediate scaling & there are still huge regulatory and market barriers in the energy sector to be overcome.

Looking ahead

The report concludes that the Catapult is effectively supporting high-potential green innovators, particularly in helping them secure vital funding. As the UK continues its journey to Net Zero, the Catapult’s role in nurturing the next generation of clean tech leaders is more important than ever.

If you’re an innovator in the energy sector, get in touch to find out more about how we might be able to help you.

This piece of work forms part of the Catapult’s evaluation framework. We are examining the Catapult’s impact in a number of key areas, find out more on our Impact hub. We’ll be carrying out another round of difference-in-differences analysis next year, as well further qualitative research to help us better understand how to focus our efforts in the future.