This paper sets out an argument that behavioural biases and heuristics can make it difficult for small and medium‐sized firms to adopt best practice innovation processes that are necessary for competitive advantage.

It further argues that innovation services provided by creative businesses can help address these behavioural failures to improve the innovation performance of firms in the wider economy.

The theory suggests a number of hypotheses to be tested by NESTA's proposed Creative Credits pilot. More generally it suggests that vouchers can be used on a one‐off basis to 'nudge' firms towards increased use of innovation services.