Report highlights how tech sector can be helped to raise its game

THE TECHNOLOGY sector in the north should be helped to raise its game by better transport infrastructure and the introduction of more city mayors, according to a new report.

The independent think tank Policy Exchange says cities like Liverpool, Manchester, Leeds and Sheffield are not seeing as much benefit from technology as London and the South East and calls for the government to put “rocket boosters” under the idea of directly elected mayors.

It says directly elected mayors with “appropriately devolved powers” could lead economic growth, including the development of tech clusters in their areas.

Policy Exchange says the northern cities have the potential to be leading European tech centres, but won’t fulfil this aspiration until road and rail links between them are improved.

Action too is needed to arrest the brain drain from universities in the north with too many graduates leaving, the report says.

The government should promote the strengths of the northern region as “a cluster of clusters”, the report recommends. “To an international audience, a ‘northern powerhouse’ offering different specialisms but collaboration where required could be very attractive.”

It concedes that northern cities may struggle in the short term to compete with leading technology clusters around the world, but, collectively, “they have the right resources in abundance”, the report says.

“Holding them back from realising those combined strengths are the poor road and rail connections that link them. Government should focus on improving transport infrastructure across the whole region to unleash its economic potential.”

The report says that Britain is already benefitting from the growth of technology firms with 1.2million people employed in the sector. The technology sector also received more equity investment than any other sector over the past three years. However, the fruits of this success are predominantly being felt in and around London and the South East.

Regarding the brain drain, it says Over a third of graduates from major universities leave the North East (37%) and North West (36%) while as many as 55% leave Yorkshire and the Humber.

For STEM subjects, the figures are 35%,34% and 52% respectively. Those from the top ranked universities leave in higher numbers.

Other concerns include:

::A lack of local leadership. As many as 37 local authorities are covered by more than one Local Enterprise Partnerships (LEPs), creating a mismatch between the geography over which LEPs have responsibility and the business communities on the ground.
::Access to finance. A study by the UK Business Angel Association found that businesses in London and the South East attracted 54% of angel funding in 2012/13. At a venture capital level, the two regions also dominated, receiving 58% of total UK investment.
::Transport links. The average speed of journeys from Manchester, Newcastle, Liverpool, Leeds and Sheffield to London is 77.6mph, compared with an average speed between those northern cities of just 46mph. Slow journeys make it harder for people to move between clusters to access and share work, ideas and opportunities and is a major barrier for foreign and London based investors.