An economic approach

Founded in 1999, Frontier Economics has a simple remit: it comes to the aid of its clients through a combination of economics and analysis, mixed with a drop of plain old common sense. The firm's work helps clients to refigure strategy and make decisions that will lead them to be stronger and more effective companies in the long term. The firm's expertise covers competition policy, public policy, regulation, strategy, contract design and evaluation, dispute support services, and market design and auctions, and stretches across nine industries: energy, financial services, health care, media, post, retailing, telecoms, transport and water.

Unique in using economics as a tool to get to the bottom of where a company is going wrong, Frontier looks at everything from company costs and customer behaviour to the overall economic landscape and how it is affecting their clients. However, just because its work is in depth doesn't mean its solutions are overly complicated; the consultancy steers away from getting bogged down in complex methodologies in favour of the more straightforward approach of finding something a client can do that the competition can't. As a result, the folks at Frontier conduct their business-and give advice-on a case-by-case basis, rather than using case studies or "other off-the-shelf techniques". It's an approach that seems to be paying off: The firm has pulled in clients of the stature of Tesco, HSBC, RWE, Vodafone, the NHS and Lloyds. 


Working publicly 

In addition to its private-sector work, Frontier's public policy work helps keep its experts busy. Indeed, Frontier proudly claims to have worked for most of the UK's government departments in some capacity over the years, helping them uncover the impacts of implementing new policy through a range of analytic tools, including cost-benefit analysis, policy impact assessments and market studies. Recently, the consultancy has worked with the National Health Service to assess the impact of reforms on hospital finances; was commissioned by the Department for Environment, Food and Rural Affairs to look into housing affordability issues in rural Britain; and also helped a number of government departments to gauge the likely impact of new climate change initiatives. The firm's pro-bono work has also helped charities check, and then demonstrate, the social return on their investment. For example, Frontier assisted the children's charity Whizz-Kidz to show how much it was improving lives and saving money by getting the right wheelchair to disabled children, first time, often cutting out weeks of frustration and cost.



July 2014

BIS publishes Frontier report on the returns to investment in science and innovation

The Department for Business, Innovation and Skills (BIS) published a report by Frontier (Europe) which examines the returns to investment in science and innovation.  The report draws on an extensive review of the economic literature, analysis of public investments and interviews with firms in the aerospace and life sciences sectors (which are highly research intensive). Read more.


July 2014

Frontier presents at CRESSE competition and regulation conference

David Foster and Goran Serdarevic of Frontier (Europe) presented at the annual CRESSE conference on competition and regulation in Corfu.  The conference brought together academics and practitioners from around the world, including Professor Michael Riordan (Columbia University) and Professor Luis Cabral (L. N. Stern School of Business), to discuss advances in competition and regulatory policy.

David and Goran's presentation was based on their research paper analysing how uncertainty affects investment in the mobile telecoms sector. In particular, the paper examines how uncertainty about future demand may reduce firms' incentives to invest under a 'strict' merger policy regime. Read more.


July 2014

Germany not in need of capacity mechanisms, but power market reforms required

The German Federal Ministry of Economic Affairs published two reports by Frontier (Europe) on the design of the German electricity market and potential options for its reform.

The first report-by Frontier and Formaet Services-analyses the potential deficiencies of 'energy-only' markets (markets where producers are paid per unit of electricity generated but not for capacity), and in particular the German market. The report finds that the German market framework can work effectively, provide security of supply and minimise costs.  However, reforms are required to maintain the sustainability of this framework.  These include removing barriers preventing consumers from responding flexibly to price signals, and providing better incentives for market participants to balance generation and consumption. A short version of the report is available in English.

The second report - by Frontier and Consentec - assesses several capacity reliability mechanisms (CRMs), which provide a payment to power plants that guarantee a minimum level of capacity.  The report examines the impact of CRMs on security of supply, social welfare, costs for customers and other indicators. It finds that CRMs are highly complex and come with substantial risks for market efficiency. They could therefore create additional costs without always improving the reliability of the system (compared to the reforms described in the first report). The report concludes that policymakers wishing to achieve additional insurance against power outages should instead implement a  'reserve mechanism'.  Under such a mechanism,  reserve capacity is held for use only in case of a shortage (and not used under normal circumstances).  Reserve mechanisms can be implemented easily, maintain the basic functioning of the power market and come at comparatively low cost. A  short version of the report is available in English. Read more


June 2014

Against the odds: Frontier bulletin on the value of teams at the World Cup

With the World Cup kicking off this week, Frontier (Europe)'s latest bulletin estimates the economic value of the leading national football teams taking part.

Frontier undertook a similar analysis for the 2010 World Cup, when eventual champions Spain also topped our list of most valuable teams. The results this time, however, throw up some surprises. Argentina heads our economic league table, largely thanks to star man Lionel Messi, who alone is valued at an eye-watering £130 million - nearly as much as the entire Italian team. By contrast, Brazil, the tournament favourites, only have the fourth most valuable team - barely ahead of little-fancied England.

So is an upset in store? Or will home advantage propel Brazil to lift the trophy for a record sixth time? Let the debates - and the games - begin.  Read more.


April 2014

Heathrow Airport published an independent  by Frontier Economics (Europe) which looked at the impact of different options for airport expansion on competition and choice for passengers. As airport capacity gets congested, passengers are likely to suffer in a number of ways, including rising ticket prices (to keep demand down to the available capacity) and a restricted choice of direct routes. With Heathrow full, passengers are already experiencing these impacts. Moreover, with demand for air travel continually rising and Gatwick also likely to be full before 2030, these costs are set to grow significantly. Read more.


July 2013 

Gus O'Donnell to become chair of Frontier as Sarah Hogg retires after 14 years

Frontier (Europe) announced that Gus O'Donnell is to become its new Chair. He will be taking over from Sarah Hogg, who is retiring after 14 years as Chair of Frontier.

Commenting on the changes, Sarah Hogg said, "Now we have found the perfect successor I am able to retire, after 14 great years in the role, knowing Frontier is in good hands for the next stage of its development. It has been an extraordinary story of growth by a business that has set the highest standards for its people and the work they do for clients. From its beginnings in 1999, Frontier has developed into one of Europe's leading economics consultancies, gaining business consistently, even through the downturn, and successfully extending its reach into new markets. I would like to thank everyone at Frontier for the quality and integrity of what they do, and our many blue-chip clients for giving Frontier so many opportunities to take on challenging and exciting assignments. We have won many awards for being 'a great place to work' and the incredible loyalty of our client base demonstrates our commitment to being great people to have working for you. I know Gus will have as much fun as I have had chairing Frontier in the future."

Commenting on his appointment, Gus O'Donnell said, "Frontier is a company I have come to respect hugely and I am delighted to take over as its Chair. Not only is Frontier at the forefront of applying economics to tough public and private sector issues, it has an internal culture that is second to none. I am looking forward to helping Frontier continue its impressive journey".

Simon Gaysford, Director of Frontier, said of the appointment, "We are delighted that Gus has agreed to become our Chair as we prepare to take Frontier to the next stage of its growth. At Frontier we believe passionately in the power of economics to help our clients - whether in business strategy, market regulation, competition policy or public policy. As an internationally respected economist, with the highest level experience of policy-making, Gus is extremely well placed to help us build on our significant success of the past 14 years." Read the full press release here.

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Frontier Economics Ltd.

71 High Holborn
London WC1V 6DA
Phone: 44 (0)207 031 7000
Fax: 44 (0)207 031 7001


  • Employer Type: Private
  • Chairman: Gus O'Donnell
  • 2014 Employees: 155

  • Employment Contact

  • Major Departments & Practices

    Competition policy

    Contract design and evaluation

    Dispute support services

    Market design and auctions

    Public policy






Major Office Locations

  • London, United Kingdom

  • Brussels


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