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In a series of European Union funded projects over the last 13 years, a computational simulation model (`SKIN') has been developed at the University of Surrey. SKIN has been used to perform ex post and ex ante policy evaluation for the European Commission and others to test proposed innovation policies and the model is now also being used around Europe for similar purposes at the national level.
These newly developed computational methods have been applied to allow policy makers to examine and understand the potential effects of interventions in complex innovation systems.
The funding of innovative SMEs is widely recognised to suffer from market failures and has been an area of policy concern since the 1930s. Sussex research has contributed significantly to understanding the underlying causes of these market failures, particularly for innovative firms in the UK and EU. It has placed stronger emphasis, than was the case in the past, on addressing demand -, rather than supply-side constraints (caused by the limited number of UK firms capable of generating commercial returns). This enables it to contribute towards the design and implementation of more effective equity support.
Research carried out by members of the Credit Research Centre (CRC) at the University of Edinburgh has changed the way that credit risk modelling teams in major multinational retail banks think about and model the probability that an applicant will default on a loan. Such models are used monthly to assess the risk associated with most of the 58 million credit cards in the UK and hundreds of millions of credit cards elsewhere in the world. The research has also changed the way banks model a crucial parameter in the amount of capital they have to hold to comply with international regulations, and has allayed their concerns about estimating models based on only samples of previously accepted applicants.
The UK Survey of SME Finances (UKSMEF) was conceived and developed by Dr W.S. Fraser to provide policy makers, and other users of the research, with a detailed analysis of SMEs, their owners and the availability and cost of finance. This innovative UKSMEF project has had sustained and on-going impact, playing an essential part in informing national policy to address the financing of the SME sector, and has resulted in providing SMEs with better access to finance opportunities, as well as leading to initiatives such as the Enterprise Finance Guarantee and the Ethnic Minority Business Taskforce. As a result new sources of finance for SMEs have been created and the UKSMEF has provided an on-going evidence base for policy-makers, aiding decision making and policy development.
The ability of companies and organisations to pay and recover debts affects and reflects the financial health of UK PLC. Research by the Credit Management Research Centre (CMRC) led by Professor Nick Wilson has directly influenced UK government policy and regulation, leading to the development of tools and guidance to alleviate short and long-term financing problems for large and small businesses and organisations. The research has improved understanding of alternative forms of corporate finance for new ventures, growth and corporate restructuring. Improved knowledge has been gained on why some businesses grow and others fail in relation to financing, financial management and governance. Research has led to changes in the debt management systems and procedures in the public and private sector.
Loudness is the subjective magnitude of a sound as perceived by human listeners and it plays an important role in many human activities. It is determined jointly by the physical characteristics of a sound and by characteristics of the human auditory system. A model for predicting the loudness of sounds from their physical spectra was developed in the laboratory of Professor Brian Moore with support from an MRC programme grant.
The model formed the basis for an American National Standard and is currently being prepared for adoption as a standard by the International Organization for Standardisation (ISO). In addition, the model has been widely used in industry worldwide for prediction of the loudness of sounds, for example: noise from heating, ventilation and air-conditioning; inside and outside cars, and from aircraft; and from domestic appliances and machinery.
A two-dimensional flood inundation model called LISFLOOD-FP, which was created by a team led by Professor Paul Bates at the University of Bristol, has served as a blueprint for the flood risk management industry in the UK and many other countries. The documentation and published research for the original model, developed in 1999, and the subsequent improvements made in over a decade of research, have been integrated into clones of LISFLOOD-FP that have been produced by numerous risk management consultancies. This has not only saved commercial code developers' time but also improved the predictive capability of models used in a multimillion pound global industry that affects tens of millions of people annually. Between 2008 and 2013, clones of LISFLOOD-FP have been used to: i) develop national flood risk products for countries around the world; ii) facilitate the pricing of flood re-insurance contracts in a number of territories worldwide; and iii) undertake numerous individual flood inundation mapping studies in the UK and overseas. In the UK alone, risk assessments from LISFLOOD-FP clones are used in the Environment Agency's Flood Map (accessed on average 300,000 times a month by 50,000 unique browsers), in every property legal search, in every planning application assessment and in the pricing of the majority of flood re-insurance contracts. This has led to more informed and, hence, better flood risk management. A shareware version of the code has been available on the University of Bristol website since December 2010. As of September 2013, the shareware had received over 312 unique downloads from 54 different countries.
This case demonstrates how researchby the Centre for International Business University of Leeds (CIBUL) between 2001and 2008 has been utilised by Nestlé - the world's largest nutrition company - to improve its communication strategy and evaluate how its foreign investments create value and influence economic development, innovation, environment, society and different stakeholder groups (e.g. employees, suppliers and governments). CIBUL's research has also (1) improved the services offered by intermediaries such as the investment-promotion arm of the British government (the UKTI) and the UN body for economic development (UNCTAD), and (2) benefited the businesses thatthese bodies serve by identifying factors that help theminternationalise and derive greater value from international expansion.
The European Central Bank (ECB) uses forecasting tools to make predictions about the Eurozone economy as a whole. The University of Leicester has worked with the ECB to modify its main forecasting tool to improve its ability to take effective and timely action to keep inflation low and minimise deflation.
Similarly, the United Nations prepares a submission to each G8 Summit which includes forecasting and policy analysis based on the economies of the 193 member states. The forecasting tool used to create this submission has also been created in collaboration with the University of Leicester. These modelling tools help the world's most powerful leaders - both political and financial - to make informed and timely decisions about issues affecting economic stability, global food security and international safety.
LSE-led research developed formally, and tested empirically, a model of the term-structure of interest rates based on market segmentation. This research was developed prior to the Quantitative Easing (QE) programmes that central banks in the UK and the US have been undertaking since 2009. This research significantly influenced the design and execution of these QE programmes because it provided central banks with (i) a scientific underpinning for their actions, and (ii) precise quantitative guidance as to what the effects would be. QE, through its effects on interest rates, has inarguably played a pivotal role in recovery strategies from the recessions following the financial crisis.