Collaboration, access to skills and funding availability are key
By Graham Pearce, head of technology at KPMG in the North.
The North of England’s burgeoning technology scene has become one of the region’s most exciting, dynamic sectors.
From Liverpool’s growing Knowledge Quarter and Manchester’s firmly established Media City, to Leeds’ new Government-backed Tech Hub, innovators and disruptors of every size are heading to our cities. We’re setting the standard in biotech, advanced manufacturing, low-carbon energy technology, gaming and cloud computing, to name but a few.
It’s also fantastic to see the level of investment match the sector’s pace and appetite. Our two most recent Northern Tech Investment Barometers found that in the last six months of 2017 alone, £264 million worth of investment capital was deployed to support Northern technology businesses. A notable proportion of this money came from international sources – a sign of growing recognition.
Overseas investment in UK technology has historically been London focused, but recent transactions highlight growing interest in the North from abroad. Funds are making their way from tech enterprises and financial investors from across the US, Europe and Asia.
We don’t expect this upwards trajectory to show any sign of slowing soon. That said, rapid growth presents its own very specific set of challenges. In a market that is constantly evolving, even disruptors must regularly re-think their approach to stay relevant.
Now, when it comes to marketing technology products and services, new entrants and established names alike are spending money to stand still. This challenge will become more acute as the sector becomes increasingly crowded.
One of the industry’s best attributes is the key to combating this. Technology businesses have always been good at collaborating and we’re now seeing more firms band together to create their own commercial ecosystems.
Sage Marketplace is a great example from which tech firms in the North can learn. The software company has created a global network where growing tech businesses can be listed under the banner of a recognisable brand, giving them credibility and allowing them to focus spending on developing their core offering, instead of diverting funds to cover operational, or marketing costs.
Being physically close to likeminded companies also fosters collaboration. Shared work environments and hubs of joint activity have always been hallmarks of the tech scene, helping start-ups forge partnerships, innovate and grow.
Up and coming tech businesses are really leading the charge on this front in the North. The Albert Estate in Manchester is but one example of a thriving city-centre community where businesses are sharing spaces and profiting from a collaborative environment.
This kind of set up is growing in popularity, and is causing young professionals to flock to the North of England to live and work. But, saying this, more needs to be done to cultivate the skilled workforce that will support the region’s technology sector as it continues to grow.
Building the workforce of the future
A common challenge for tech businesses, no matter where they are based, is accessing and attracting the right talent. Encouragingly, the North is a popular destination for young people who want to study, which has helped build one of largest student populations in Europe. Such a concentration of graduates and academic institutions provides a critically strong talent pool for growing tech businesses to tap into.
However, increased involvement and the attention of organisations spanning the private and public sectors is needed if we’re going to retain the skilled graduates we produce within the region. We need to invest in affordable housing, amenities and connectivity to make our cities and towns attractive.
Equally, we can’t just focus on university students, we need to promote alternative routes through education and initiatives that can drive the next generation’s interest in technology. Apprenticeships are one way to do this. KPMG recently launched a digital degree apprenticeship to help build the next generation of tech experts. The four-year programme combines on-the-job work experience with the opportunity to gain a degree.
There must also be support, and importantly, funding available for ambitious young people wanting to start their own technology businesses. The good news is there are already a number of resources available for budding tech start-ups across the North.
Great initiatives like the Manchester Tech Trust and NorthInvest have been established to help connect entrepreneurs and start-ups in the North to the funding they need and we’ve seen investment vehicles such as Accelerated Digital Ventures in MediaCity and the Northern Powerhouse Investment Fund emerge over the past couple of years.
The North of England’s technology sector is on the up. With the right level of investment, a collaborative, innovative mindset and a concerted effort to cultivate the talent it needs to thrive, the sky’s truly the limit.