Impact Evaluation of the Industrial Strategy Challenge Fund

The Industrial Strategy Challenge Fund (ISCF), launched in 2017 with £2.6 billion in government investment, represents one of the UK’s most ambitious mission-oriented research and innovation (R&I) programmes. Spanning 20 distinct Challenges across four thematic areas – Healthy Society, Data and Digital, the Future of Mobility and Clean Growth – the Fund was designed to catalyse collaborative R&I, boost private investment, enhance cross-sector engagement, encourage multidisciplinary research, and strengthen the UK’s innovation networks, all while addressing critical societal challenges.

The Fund was established through three sequential funding waves, with the Challenge selection approach evolving for each wave. An evaluation of the Fund’s activities was commissioned to run in parallel to the programme waves across five phases; as a result, it draws from an assessment of Challenges against their individual objectives as well as the broader Fund-level evaluation framework. This report presents the results of Phase 4, the final impact evaluation (Phase 5 will be an econometric analysis). While the evaluation has been timed to coincide with the later stages of many Challenges, it is important to note that impacts are expected to continue beyond the evaluation period. As such, the findings in this report represent a snapshot in time of the impact accrued to date.

This evaluation, conducted by RAND Europe and Frontier Economics, draws on a wide evidence base, including Challenge-level evaluation reports, network analysis, investment outcomes analysis, project completion data, policy citation analysis and stakeholder engagement. The analysis focuses on five core themes: knowledge creation and innovation pathways; capacity building and investment; connected innovation ecosystems; economic outcomes and impacts; and wider societal benefits and impacts.

Data coverage varies by Challenge; with the exception of the Faraday Battery Challenge, Wave 1 Challenges concluded by August 2023, Wave 2 Challenges concluded by June 2024 and Wave 3 Challenges concluded by March 2025.

The findings reveal a programme that has decisively enhanced the UK's innovation capability and collaborative culture, while highlighting important lessons for future mission-led R&I initiatives.