When it comes to UK tech start-ups, London is usually the focus of attention. However, Silicon Roundabout is by no means the only place where technology development is being nurtured for high growth.
From Edinburgh to Hull, Newcastle to Bristol, cities and business associations are developing vibrant tech sectors that plug into the local economy. And they are courting the attention of the media, investors and key talent to achieve this.
So what will determine the success of these new ‘hubs’? And can they all realise their aspirations?
In my opinion, success depends on creating the best possible conditions for growth. Like planting a garden, the first thing to do is lay fertile soil. Hubs rely upon the right mix of people, money and market infrastructure… this is easier said than done!
Even London, and its leading tech sector, faces a well-reported skills shortage. As my colleague Ingrid Waterfield, from KPMG’s People Practice in London, commented, “the battle for the best talent in the Capital is well and truly on… Combine this with the fact that other regions across the UK, with much lower costs of living, are witnessing stronger salary inflation levels than London, and we have a… situation emerging which needs to be monitored.”
Cities that seek to grow their own tech sectors, both established and nascent, will be looking to capitalise on developments like salary inflation.
Take Cambridge, for example. Cambridge is the UK’s original Tech City and an important source of business and IT talent. The city has a pioneering technology and research sector, and is home to some of the UK’s top university courses. It has a track record of creating successful companies. In ARM, Autonomy, Raspberry Pi and Cambridge Antibody Technology (to name but a few) the city has created, built and sold companies on a global stage. This history is still attracting capital. In addition to the renowned Cambridge Angels network, in 2013 Cambridge Innovation Capital raised an initial £50m from long-term institutional and strategic investors to support local high growth technology companies.
Crucially, Cambridge has proven it can attract capital too.
On the matter of funding, cities that demonstrate they are easily accessible to VCs will also do well.
The action isn’t just occurring in one part of the UK. Hull, as a city that is part of the ‘M62 corridor’, is an interesting case. In 2013 the C4DI Beta workspace opened its doors to start-ups and businesses, ahead of a planned multi-million pound digital centre. This year the C4DI Accelerator is set to launch and the city is gearing up for 2017, when it will be recognised as the UK City of Culture. Yet with ‘competitor’ cities like Manchester, home to a local TechHub and the Sharp Project, and Liverpool in easy reach along the M62 corridor, finding a point of differentiation will be crucial.
Perhaps, therefore, the biggest challenge will be for each contender city to market itself effectively and create a compelling, lasting value proposition that attracts a range of stakeholders. This could be based on the local skills base, such as UX design, or the makeup of the immediate business community, such as a focus on pharmaceuticals.
In the face of Silicon Valley’s continued dominance, the UK’s various tech communities will need to work together.
At KPMG High Growth Tech Group we aim to be a point of contact for the tech community, and a route into the expertise and experience of the wider KPMG network, whether across the UK or the world. Follow me on twitter @startup_people for my observations on the tech sector, worldwide.