What works in supporting the growth of the tech sector?

What works in supporting the growth of the tech sector?

Lessons from an impact evaluation of Tech Nation

Frontier Economics was recently commissioned by the Department of Digital, Culture, Media and Sport to evaluate the impact of the Tech Nation programme. Tech Nation aims to support the growth of the UK digital technology sector through a range of initiatives for every stage of business growth, with some initiatives providing more hands-on support than others.

We split the programme into four areas with a different evaluation technique being adopted for each area. This enabled us to obtain a comprehensive review of the outcomes and impacts resulting from the Tech Nation programme, and additional robust quantitative evidence of the impact of these types of interventions to help support future business cases.

Tech Nation’s growth initiatives, including Future Fifty, Upscale and Northern/Rising Stars supported around 150 high-growth businesses between 2014 and 2017. Using econometric techniques, we matched the supported firms to a robust control group and found that Tech Nation’s growth initiatives led to a 14%-25% increase in the employment of supported businesses 1 to 2 years after they have completed the initiative. This implies that these initiatives generate significant additional Gross Value Added (GVA). Future Fifty and Upscale, the two largest initiatives, generate around £11m to £20m, and £4m to £7m respectively, for each cohort of supported firms.

In the figure below, we show the growth trajectory of participating firms compared with both the broader control group of all firms in our data and the narrower control group estimated using propensity score matching (PSM).

We also found qualitative evidence that other Tech Nation initiatives, including the Digital Business Academy, Founders’ Network, and the Tech Nation visa scheme have had a positive impact with Digital Business Academy and Founder’s Network helping users achieve their goals at a superior level than available alternatives. The evaluation found that these initiatives could be expanded at relatively low cost, and provide benefits to a substantially wider pool of users than their current base. We also found that Tech Nation runs the programme cost effectively. For example, the Tech Nation visa scheme provides the only entry route in the UK for a number of highly skilled migrants, reducing the administrative burden on the Home Office.

Frontier also provided recommendations for the future operation and evaluation of Tech Nation initiatives, and to find out more you can download the full report by clicking the link here.

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