The startup growth programmes run by Tech Nation generated a greater impact value than their public grant funding, according to government-commissioned research.
An evaluation of the efficacy of funding granted to Tech Nation during its final three years, conducted by consultancy firm Frontier Economics, found the organisation’s growth programmes generated £44m in economic impact.
During that time it received a cumulative £17.5m in public funding. The impact figures are based on the contribution to UK gross value added (GVA) from increased employment at startups participating in growth programmes.
The report noted that a £34m impact came from the first two years of the timeframe and an additional £10m came from the third.
It acknowledged that additional benefits would likely be realised after the publication of the report, which means the total financial impact is likely to be higher than £44m.
Prior to closing operations in March after losing its government funding, Tech Nation said it provided a £15 return on investment for every £1 investment in public funding over its lifetime.
The report, which was carried out for the Department for Science, Innovation and Technology (DSIT), “could not confidently estimate how much impact was generated per £1 spent by DSIT” for its Rising Stars and growth programmes due to data limitations.
However, it found that Tech Nation’s programmes supporting startups transitioning into scaleups had “a substantial positive impact on the growth of participating firms”.
Despite efforts to widen its regional reach, the report found that around half of the participants in Tech Nation growth programmes were based in London during the last cohort period.
Tech Nation failed to implement some recommendations from a 2019 review, the report noted, including better recording of outcome data and systematically allocating overhead costs to each initiative.
The findings follow the government’s decision in January to reallocate the Digital Growth Grant – Tech Nation’s primary source of funding – to Barclays Eagle Labs, a startup support group owned by the banking giant.
Tech Nation was left with an insurmountable funding gap and closed operations two months later. The brand was then acquired by Founders Forum. In July, UKTN revealed that the entrepreneur network was preparing to relaunch the Tech Nation brand in the autumn.