1st August 2026
Economic development agencies frequently publish impressive statistics: thousands of jobs created, businesses supported and millions of pounds of investment attracted. But one question is often much harder to answer: how much of that success actually happened because of their intervention?
This is one of the biggest challenges facing organisations such as Highlands and Islands Enterprise (HIE) and Scottish Enterprise.
The issue is not whether they should support businesses.
The issue is whether their reported achievements accurately measure the impact of that support.
The "would it have happened anyway?" question
The most important concept in economic evaluation is known as additionality.
It asks:
Did public intervention create something that would not otherwise have happened?
For example:
A company receives funding and creates 100 jobs.
That sounds like a clear success.
But what would have happened without the funding?
There are several possibilities.
Genuine additionality
The company could not have expanded without support.
The jobs would not have existed.
The intervention clearly made a difference.
Partial additionality
The company would probably have expanded anyway, but support allowed:
Faster growth.
More jobs.
A larger investment.
The intervention helped, but perhaps not as much as claimed.
Little or no additionality
The company was already planning the investment.
Public funding reduced costs but did not significantly change the outcome.
This is where criticism often arises.
The problem with headline statistics
Numbers such as:
Jobs created.
Jobs safeguarded.
Businesses supported.
Investment attracted.
are easy to communicate.
However, they do not always reveal the full picture.
A job figure does not tell us:
Whether the job lasted.
Whether it was full-time.
Whether it was highly skilled.
Whether another job disappeared elsewhere.
Whether the company would have created it anyway.
The difficulty of "jobs safeguarded"
Jobs safeguarded are particularly difficult to verify.
A company may state:
"Without assistance, these jobs would have been lost."
But proving that is extremely challenging.
Was public money genuinely preventing closure?
Or was it supporting a business that was likely to survive anyway?
This does not mean safeguarded jobs are meaningless.
It means they require careful evaluation.
How should success be measured?
A stronger approach would look beyond headline figures.
Important questions include:
What was the cost per job?
A high-value skilled manufacturing job may justify greater support than a temporary low-paid position.
Did the investment attract private money?
Public funding is often most valuable when it unlocks much larger private investment.
Did the business survive?
Short-term job creation is less valuable if the company disappears a few years later.
Did it create wider benefits?
Did it encourage:
Supply chains?
Training?
New companies?
Export opportunities?
Did the region become stronger?
The ultimate aim should be economic improvement, not simply project completion.
The danger of measuring the wrong things
Organisations naturally focus on statistics they can report.
A statement saying:
"We supported 500 businesses"
sounds impressive.
But the more important question is:
"What changed because those businesses were supported?"
Economic development is about outcomes, not activities.
The need for independent evaluation
Public confidence depends on honest assessment.
Major projects should be reviewed independently.
Evaluations should examine:
Original assumptions.
Actual results.
Costs.
Long-term benefits.
Lessons for future decisions.
This is especially important when public money is involved.
A balanced approach
There are two equally damaging mistakes.
The first is believing every investment creates guaranteed success.
The second is becoming so afraid of failure that agencies only support safe projects.
A region that refuses to take risks may never create new industries.
But a region that does not learn from failures will repeat mistakes.
The real test for organisations like HIE
The question should not be:
"Did every investment succeed?"
That is unrealistic.
The better question is:
"Over many years, did these interventions create more economic opportunity than would otherwise have existed?"
That requires looking at:
Population trends.
Business growth.
Productivity.
Skills.
Investment.
Economic resilience.
Conclusion
Economic development is not easy to measure.
Statistics can show activity, but they do not always prove impact.
The challenge for organisations such as HIE is to continue taking the risks needed to transform the economy while providing evidence that those risks are producing genuine long-term benefits.
The public should not demand that every project succeeds.
But it is reasonable to demand that success is measured honestly.