{"id":1481,"date":"2019-02-09T00:00:00","date_gmt":"2019-02-09T00:00:00","guid":{"rendered":"https:\/\/www.techsparx.co.uk\/north\/uncategorized\/can-tech-sector-thrive-outside-london\/"},"modified":"2025-02-28T14:38:20","modified_gmt":"2025-02-28T14:38:20","slug":"can-tech-sector-thrive-outside-london","status":"publish","type":"post","link":"https:\/\/www.techsparx.co.uk\/north\/can-tech-sector-thrive-outside-london\/","title":{"rendered":"Can the tech sector thrive outside London?"},"content":{"rendered":"<p>An appetite for collaboration is helping clusters across the north of England to flourish &#8211; but there are also key issues holding them back<\/p>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignleft size-medium wp-image-11352\" src=\"https:\/\/www.techsparx.co.uk\/north\/wp-content\/uploads\/2018\/11\/London-300x180.jpg\" alt=\"London\" width=\"300\" height=\"180\" \/><\/p>\n<p>There\u2019s no doubt that London has firmly established itself as a leading digital hub. Last year, the turnover by its digital tech businesses\u00a0was \u00a364.1bn, the highest of any cluster in the UK, and\u00a040% of new technology startups\u00a0were based in the capital. Startups and investors work in close proximity, and there\u2019s plenty of advice for ambitious entrepreneurs. \u201cYou could go every single night of the week to an event on how to pitch for funding,\u201d says Mike Jackson, entrepreneur success director at Tech Nation, speaking at a recent Guardian roundtable in Liverpool, supported by Cisco.<\/p>\n<p>But London is only part of the UK\u2019s tech story, and the discussion focused on the future of the burgeoning tech scenes in the north of England.<\/p>\n<p>While there are distinct advantages to being based outside the capital (such as a lower cost of living), businesses are still hamstrung by four primary problems, Jackson told participants. These structural weaknesses outside London are:<\/p>\n<ul>\n<li>Access to capital.<\/li>\n<li>Access to growth space [not for small startups, but office space for businesses that are growing to 20-, 50-plus employees].<\/li>\n<li>Access to second-generation mentorship \u2013 people who have \u201cdone the journey\u201d and are giving back the benefits of their experience to younger tech companies.<\/li>\n<li>Access to talent, not just developer talent, but CTOs (chief technology officers), CMOs (chief marketing officers), CPO (chief procurement officers).<\/li>\n<\/ul>\n<p>Jackson suggested a lack of potential investors willing to look too far outside of London was a big problem. \u201cCapital is an issue for almost every [tech] cluster outside London,\u201d he said. David Woods, co-founder and chief operating officer of Liverpool-based LivingLens, a video intelligence platform, agreed, adding that he found investors in London to be less risk averse: \u201c90% of our funding has come from London. We had to go down there to raise money.\u201d<\/p>\n<p>A willingness for schemes and investors alike to think more long-term was also needed, according to venture capital expert Will Clark from Mercia Technologies. \u201cWhether it\u2019s a government-backed scheme or not, it\u2019s got to take a longer-term view,\u201d he said. \u201cOne of the most successful businesses that has come out of this region \u2013 Blue Prism in Newton Le Willows \u2013 took 12 years to come to fruition.\u201d<\/p>\n<p>However, finance isn\u2019t the only issue holding businesses back, according to Ian Finch, co-founder of digital agency Mando and chair of BIMA North West. He said companies in the north were still struggling to make the journey from small startup or sole trader to bigger business, which could partly be down to a lack of second-generation tech entrepreneurs able and willing to pass on the benefits of their experience.<\/p>\n<p>Recruitment, on the other hand, isn\u2019t a challenge, according to Andy Cooper, co-founder of Draw &amp; Code, a tech studio in Liverpool. He said a more affordable lifestyle, including cheaper housing, was attracting tech workers to northern cities. \u201cWe don\u2019t have any issue attracting people to the business. Half of our staff come from outside the region, from London or from around the world. If you\u2019re young and you\u2019re in your 20s and in London then it\u2019s a great place to be, but you can\u2019t save any money when you want to start a family, so what do you do then?\u201d<\/p>\n<p>Sarat Pediredla, CEO of Newcastle-based Hedgehog Lab, a tech consultancy, said that there were now \u201chundreds and hundreds of developers in Leeds\u201d thanks to Sky Bet, whose headquarters are based in the city. However, wage demands are a challenge for northern companies when recruiting senior staff from London. He said: \u201cI remember having interviews for senior leadership team members. Their salary expectation is completely unrealistic for Newcastle. How do you go from a mid-six-figure salary [in London] to a high-five-figure salary in Newcastle? Even though that\u2019s comfortable in a place like Newcastle, there\u2019s that mental block to reducing your wage.\u201d<\/p>\n<p>Employers need to recruit graduates before they move to London, as it\u2019s harder to attract people back once they\u2019ve put down roots elsewhere, said Pediredla.<\/p>\n<p>Some participants argued that being based outside of London makes it easier to collaborate with other businesses. The more \u201copen\u201d northern attitude, and the smaller nature of its towns and cities, gives it a distinct advantage over the capital, said Vimla Appadoo, service designer at FutureGov. \u201cBecause there are smaller cities connected across the north of England you get a real sense of community. You get to understand what\u2019s going on across the region. London is too big to get under the skin of that. Across the north you can know all the startups and all the founders, and what the events are \u2013 and you can get involved.\u201d<\/p>\n<p>Collaboration has become increasingly important in the tech industry, said Finch. \u201cThe only way to deliver value to customers is to do your thing and do it the best in the world. You can\u2019t do multiple things well, so the way digital has gone you have to collaborate. The people who\u2019ve been slow to collaborate are dying off.\u201d<\/p>\n<p>The cornerstone of Liverpool\u2019s digital industries is\u00a0Baltic Creative, a community interest company founded in 2009 that has become one of the fastest-growing tech clusters in the UK. Managing director Mark Lawler said it was the hub\u2019s \u201cunique proposition\u201d of reinvesting profits back into tenants, their property and the wider sector that had made it such a desirable destination, with a waiting list and 260 enquiries for space there in the past nine months. Lawler is now looking to replicate the model elsewhere in the north-west.<\/p>\n<p>When asked where they saw the tech scene in Liverpool and the north in one year\u2019s time, the panel felt optimistic, although Finch pointed out that the prospect of Brexit was causing \u201cripple effects\u201d of nervousness. \u201cI see in our customer base procurement cycles taking longer. We\u2019re negotiating a fourth cycle with one of our customers at the minute \u2013 they\u2019ve been a customer for 10 years \u2013 and the contract has gone from 100 pages to 180. It\u2019s just stuff \u2013 GDPR this and commercial risk that. I think business is just more nervous, and when you\u2019re nervous you need to feel safe.\u201d<\/p>\n<p>John Johnson, CTO at Cisco, added: \u201cI\u2019m really positive. We look at investment in the north now it\u2019s increasing at pace, we can see there\u2019s a great future ahead.\u201d<\/p>\n<figure id=\"img-2\" class=\"element element-image img--landscape element--supporting fig--narrow-caption fig--has-shares \" data-component=\"image\" data-media-id=\"871b63f0ab38c991e5847c3965098867dad69b38\">\n<div class=\"u-responsive-ratio\"><picture><source srcset=\"https:\/\/i.guim.co.uk\/img\/media\/871b63f0ab38c991e5847c3965098867dad69b38\/0_158_3931_2359\/master\/3931.jpg?width=380&amp;quality=45&amp;auto=format&amp;fit=max&amp;dpr=2&amp;s=5a0ae07fefebe6f4a7a5cdd60c0d1e97 760w\" media=\"(min-width: 1300px) and (-webkit-min-device-pixel-ratio: 1.25), (min-width: 1300px) and (min-resolution: 120dpi)\" sizes=\"380px\" \/><source srcset=\"https:\/\/i.guim.co.uk\/img\/media\/871b63f0ab38c991e5847c3965098867dad69b38\/0_158_3931_2359\/master\/3931.jpg?width=380&amp;quality=85&amp;auto=format&amp;fit=max&amp;s=1a8e534d2afa27b397b71ef03cd28d4c 380w\" media=\"(min-width: 1300px)\" sizes=\"380px\" \/><source srcset=\"https:\/\/i.guim.co.uk\/img\/media\/871b63f0ab38c991e5847c3965098867dad69b38\/0_158_3931_2359\/master\/3931.jpg?width=300&amp;quality=45&amp;auto=format&amp;fit=max&amp;dpr=2&amp;s=543d9af6d651f3a17470e38df51377a3 600w\" media=\"(min-width: 980px) and (-webkit-min-device-pixel-ratio: 1.25), (min-width: 980px) and (min-resolution: 120dpi)\" sizes=\"300px\" \/><source srcset=\"https:\/\/i.guim.co.uk\/img\/media\/871b63f0ab38c991e5847c3965098867dad69b38\/0_158_3931_2359\/master\/3931.jpg?width=300&amp;quality=85&amp;auto=format&amp;fit=max&amp;s=8ead07d2a6caa97d74ddb2b8aaa97f67 300w\" media=\"(min-width: 980px)\" sizes=\"300px\" \/><source srcset=\"https:\/\/i.guim.co.uk\/img\/media\/871b63f0ab38c991e5847c3965098867dad69b38\/0_158_3931_2359\/master\/3931.jpg?width=620&amp;quality=45&amp;auto=format&amp;fit=max&amp;dpr=2&amp;s=c4f6defa2522c2c6bed6a68012805208 1240w\" media=\"(min-width: 660px) and (-webkit-min-device-pixel-ratio: 1.25), (min-width: 660px) and (min-resolution: 120dpi)\" sizes=\"620px\" \/><source srcset=\"https:\/\/i.guim.co.uk\/img\/media\/871b63f0ab38c991e5847c3965098867dad69b38\/0_158_3931_2359\/master\/3931.jpg?width=620&amp;quality=85&amp;auto=format&amp;fit=max&amp;s=6b0f1ca8d926b8deaaf55fe551ef4be2 620w\" media=\"(min-width: 660px)\" sizes=\"620px\" \/><source srcset=\"https:\/\/i.guim.co.uk\/img\/media\/871b63f0ab38c991e5847c3965098867dad69b38\/0_158_3931_2359\/master\/3931.jpg?width=605&amp;quality=45&amp;auto=format&amp;fit=max&amp;dpr=2&amp;s=2d8d96902324e383ea260c77adc15b0e 1210w\" media=\"(min-width: 480px) and (-webkit-min-device-pixel-ratio: 1.25), (min-width: 480px) and (min-resolution: 120dpi)\" sizes=\"605px\" \/><source srcset=\"https:\/\/i.guim.co.uk\/img\/media\/871b63f0ab38c991e5847c3965098867dad69b38\/0_158_3931_2359\/master\/3931.jpg?width=605&amp;quality=85&amp;auto=format&amp;fit=max&amp;s=0980d964c986b4d9f8c7bcc0c2e70a33 605w\" media=\"(min-width: 480px)\" sizes=\"605px\" \/><source srcset=\"https:\/\/i.guim.co.uk\/img\/media\/871b63f0ab38c991e5847c3965098867dad69b38\/0_158_3931_2359\/master\/3931.jpg?width=445&amp;quality=45&amp;auto=format&amp;fit=max&amp;dpr=2&amp;s=ccdd21d0e878d34d33465b1f8a1e28d7 890w\" media=\"(min-width: 0px) and (-webkit-min-device-pixel-ratio: 1.25), (min-width: 0px) and (min-resolution: 120dpi)\" sizes=\"445px\" \/><source srcset=\"https:\/\/i.guim.co.uk\/img\/media\/871b63f0ab38c991e5847c3965098867dad69b38\/0_158_3931_2359\/master\/3931.jpg?width=445&amp;quality=85&amp;auto=format&amp;fit=max&amp;s=0739d593b9329147efbfc7985ddf80be 445w\" media=\"(min-width: 0px)\" sizes=\"445px\" \/><\/picture><\/div>\n<\/figure>\n","protected":false},"excerpt":{"rendered":"<p>An appetite for collaboration is helping clusters across the north of England to flourish &#8211; but there are also key issues holding them back There\u2019s no doubt that London has firmly established itself as a leading digital hub. Last year, the turnover by its digital tech businesses\u00a0was \u00a364.1bn, the highest of any cluster in the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4219,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[119],"class_list":["post-1481","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tech-sparx","tag-london"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Can the tech sector thrive outside London? - Regional technology news - North - TechSparx - Business technology stories in the North<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.techsparx.co.uk\/north\/can-tech-sector-thrive-outside-london\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Can the tech sector thrive outside London? - Regional technology news - North - TechSparx - Business technology stories in the North\" \/>\n<meta property=\"og:description\" content=\"An appetite for collaboration is helping clusters across the north of England to flourish &#8211; but there are also key issues holding them back There\u2019s no doubt that London has firmly established itself as a leading digital hub. 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