The Department for Science, Innovation and Technology (DSIT) recently enlisted the expertise of Frontier Economics to conduct a comprehensive evaluation of grant funding for Tech Nation and its impact on the UK’s digital sector.

The primary aim of our evaluation was to assess the effectiveness with which this funding supported the United Kingdom's digital growth. The total investment of £17.5m spanned the financial years 2020/21, 2021/22, and 2022/23.

Tech Nation delivered a range of initiatives, each tailored to specific objectives and beneficiaries. To facilitate a meaningful evaluation, we categorised Tech Nation's DSIT-funded initiatives into two primary groups, Growth Programmes and Rising Stars, and also other smaller initiatives.

The findings from this comprehensive study have yielded valuable insights; our analysis found evidence that the majority of Tech Nation's initiatives generated positive benefits for the digital sector. Our study also notes that certain initiatives like Growth Platform were established very recently, meaning a full assessment of their impact could not accurately be performed.

Our team used an econometric approach to estimate the impact of Growth Programmes, such as Future Fifty and Upscale, on digital start-up and scale-up beneficiaries. These firms saw a clear acceleration in their growth from participating in the programmes, with employment levels increasing by 27% during the first year, and rising further to 37% by the end of year two as a result of their participation. These initiatives alone generated an estimated £44m, an outcome that exceeds the total funding provided to Tech Nation by DSIT during the evaluation period.

Furthermore, our evaluation revealed that all of Tech Nation's activities funded by DSIT successfully reached their intended beneficiaries. Across the period under consideration, Tech Nation implemented various changes to its initiatives that significantly expanded regional reach, with the proportion of participants from regions outside of London steadily increasing. However, as of the 2022/23 financial year, half of the participants remained concentrated in the UK’s capital city.

Our evaluation underscores the significant positive contributions that DSIT's funding enabled for Tech Nation's initiatives to foster growth within the UK's digital sector. While challenges remain in fully assessing certain aspects of these initiatives, the overall impact on the sector our analysis identifies provides fresh insights on future DSIT funding considerations.

To read the full report, click here or download below.

For more information, please contact media@frontier-economics.com or call +44 (0) 20 7031 7000.