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Diversifying the Technology Landscape in the UK

Tue 11 Apr 2023

The technology landscape in the UK has long been dominated by London, with its start-up ecosystem valued at $314 billion according to the 2022 Global Startup Ecosystem Report. The major size of London as a tech capital helps attract leading talent, reducing the number of skilled staff and innovative entrepreneurs left in other cities such as Edinburgh, Manchester and Reading.

But there is untapped potential in cities outside the capital. By focusing on strategic government policies, university support, and investment, the technology landscape in the UK can expand and flourish beyond London.

The Power of Partnerships in the UK’s Technology Landscape

A successful tech ecosystem often relies on strong collaborations between academic institutions, local businesses, and government entities. One shining example is the University of Edinburgh, which has spun out 54 companies across various sectors, including software and pharmaceuticals. Spinouts are companies created from university research, often by the researchers themselves.

Several startups originating from the University of Edinburgh have secured significant funding for growth, such as pharmaceutical firm Resolution Therapeutics, which raised £27 million in late 2020. Scottish Enterprise, a non-departmental public body, has been the largest investor in Edinburgh-based tech firms, participating in 308 equity deals between 2011 and 2020.

Strong connections between academic institutions and the tech ecosystem are essential for fostering innovation. Universities play a pivotal role in educating the next generation of entrepreneurs and providing access to cutting-edge research. Several UK universities outside London have established dedicated programs and research centers focused on technology and innovation, contributing to the growth of local tech ecosystems.

For example, the University of Bristol has launched the Quantum Technology Enterprise Centre (QTEC), which aims to train quantum engineers and create new quantum technologies. Additionally, the University of Birmingham hosts the Centre for Innovation and Entrepreneurship, providing students with resources and mentorship to develop their ideas and launch start-ups.

Government Initiatives and Policies Shaping the UK’s Technology Landscape

Supportive government policies can significantly impact the growth of tech ecosystems outside London. By providing funding, tax breaks, and other incentives, governments can help attract businesses and talent to regions with emerging tech hubs.

The UK Government’s “levelling up” agenda aims to reduce regional disparities and support economic growth across the country. This agenda includes investing in local infrastructure, such as transport and digital connectivity, which can facilitate the development of tech ecosystems outside the capital. Various initiatives to support startups and entrepreneurs, including the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS), can also offer tax relief to investors who support early-stage and growing businesses. These initiatives have the potential help create a favorable environment for tech ecosystems to thrive outside London.

> Read more: The impact of R&D tax relief reforms on UK tech businesses

Emerging Tech Hotspots Transforming the Technology Landscape in the UK

Manchester stands out as a leading tech hub outside London, hosting over 1,200 high-growth firms. The city’s robust commercial base and the presence of successful tech incubators, like The Landing and Manchester Science Partnerships, have enabled promising tech companies to scale rapidly and develop into profitable businesses.

Between 2011 and 2020, Manchester-based companies received a total of £2.4 billion across 1,421 deals, according to Barclays Bank. Meanwhile, Reading and Thames Valley, Bristol, and Birmingham are emerging as promising tech ecosystems, with local universities playing a critical role in fostering innovation and entrepreneurship, enriching the technology landscape in the UK.

Barclays Eagle Labs, a network of more than two dozen spaces across the UK, offers startups a range of services, including co-working spaces, specialised growth advice, and introductions to other organisations. The UK government has recently granted Barclays a substantial tech grant to expand the country’s technology landscape. In response, Barclays has committed an additional £24 million of its own funds to achieve this goal.

Collaboration with Industry Leaders

Establishing connections between emerging tech ecosystems and industry leaders can lead to the sharing of best practices, resources, and expertise. This collaboration can help smaller tech hubs grow and strengthen their position in the global technology landscape. Partnerships between local start-ups and established corporations can provide access to capital, mentorship, and distribution networks that might otherwise be difficult to obtain.

Multinational corporations such as IBM, Cisco, and Siemens have partnered with smaller cities and universities across the UK to support innovation and tech entrepreneurship. These collaborations create opportunities for knowledge transfer, skill development, and the commercialisation of new technologies.

The success of tech ecosystems beyond London depends on nurturing connections between academic institutions, businesses, and government entities. As cities like Edinburgh, Manchester, and Reading continue to develop their unique strengths, they will contribute to a more diverse and resilient UK technology landscape. With strategic investments and continued support, the future of the UK’s tech sector looks promising beyond the confines of London.

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