What are the fastest growing and largest technology hubs in the UK – based on tech investment, the emergence of a start-up culture, the companies residing there and the innovations being driven?
This article will seek to answer this umbrella question, and hopefully provide some insight as to where you should set-up base if you are thinking of moving location or looking to expand your global reach into the UK.
Before breaking down the country by city, it should be noted that the UK – by in large — represents a tech hub that is increasingly attractive internationally. For example, investment deals from Silicon Valley into UK tech companies have increased by 252% since 2011.
On top of this, despite concerns surrounding the controversial Brexit — a report from UK law firm Pennington Manches found that there had been a 62% increase in foreign investment into UK firms in 2017, a third of which were by North American investors.
>See also: Yoox Net-a-Porter opens London tech hub to develop AI capabilities
International investment is not restricted to North America, and Tech Mahindra, the $4.7 billion IT service provider of digital transformation, recently announced significant strategic investments in the UK.
A research and development centre ‘Makers Lab’ has been established to work in collaboration with its long-term client and partner, British Telecom (BT), at the Adastral Park research campus near Ipswich, home of the world-renowned BT Labs. Makers Lab is also a part of the growing business incubation cluster Innovation Martlesham.
The Indian-based tech giant is also setting up a brand new office in Salford to strengthen its presence across the UK, while rolling out its apprentice program in 2018.
So, it is evident that the UK represents a global tech hub, but what about the individual cities?
UK tech sector leads Europe in AI — but what about the rest of the world?
London
This will comes as no surprise, but London is the largest and fasting growing tech hub in the UK. At a glance, in the capital, there is 187,427 tech companies, with a combined turnover of £285 billion (according to research from Studio Graphene in partnership with City Road Communications) and hundreds of thousands of ‘tech hub jobs’.
London is the second most connected tech ecosystem globally, behind only Silicon Valley, and 25% of the world’s entrepreneurs report a significant relationship with two or more others based in London.
The capital has some of the most daring and ground-breaking tech companies at it’s centre. Google’s AI-centred DeepMind stands out as an example of this, with its HQ based in Kings Cross. This, however, is set to be displaced as Google makes plans for a huge 4,000-strong office.
>See also: UK’s most active tech and data innovation cities
On top of the global technology giants making their home in London, the capital has an increasing tech start-up culture. This was embodied by ‘Silicon Roundabout‘ and now increasingly in the surrounding areas of London Bridge, Soutbank and the N1 postcode, where high tech start-ups have been flocking in their thousands.
Indeed, on the City Road (the N1 postcode), the number of new businesses forming in the area jumped from 8,400 in 2015 to 14,710 in 2016 — a 75% increase — according to UHY Hacker Young.
The significant tech growth seen in London is by far restricted to the capital, and the 2018 Tech Nation report identified 16 towns in the UK — dubbed Silicon Suburbs — which are showing a higher proportion of digital tech employment than the UK average:
• Newbury
• Reading
• Basingstoke
• Burnley
• Slough and Heathrow
• Livingston
• Stevenage and Welwyn Garden City
• Guildford and Aldershot
• High Wycombe and Aylesbury,
• Southend
• Enniskillen
• Telford
• Cheltenham
• Stafford
• Huntingdon
• Swindon
An interactive representation of the UK’s global connections can be seen here:
Edinburgh
Edinburgh is not on Tech Nation’s ‘Silicon Suburb’ list because it — along with the other cities in this article – are more established technology hubs with strong foundations.
The Scottish capital is home to a number of technology companies, specialising in different spaces. Here are some examples: Skyscanner, Ice Robotics, Rockstar North, Fanduel, Agenor Technology and Zonefox.
As a whole, digital technology is Scotland’s fastest growing sector, and in 2017 the country’s capital was the fastest growing tech hub in the UK. A report from leading global developer community, Stack Overflow, found that Edinburgh’s developer population grew by 8% in the second half of 2017, bringing the developer population to nearly 20,000 – or seven developers per 100 people in the labour force.
>See also: Keeping the UK at the forefront of technological innovation
The number of crucial data scientists working in the city also grew by 19% over the same period, according to the report, which is a sign that Scottish Government-backed institutions such as The Data Lab are succeeding in improving the data science sector. Indeed, Edinburgh was identified in the top five of the UK’s most active tech and data innovation cities.
According to Tech Nation’s 2018 Report, digital jobs in Edinburgh increased over three times the UK average between 2014-2017. The significant growth of Edinburgh as a tech hub can be, in part, attributed to the quality of its world-class education institutions.
How? Institutions like the University of Edinburgh’s School of Informatics regularly provide highly skilled graduates who are ready to go into the workforce immediately.
Oxford and Cambridge
Both these cities are also famed for their universities. These institutions, along with, significantly, the number of academic research bodies relating to clinical medicine, have turned both Oxford and Cambridge into significant tech hubs in the UK.
In Oxford teleheath companies, like Oxehealth, are aplenty and innovation, spurred in part by the University of Oxford and it’s associations, is rife. The city has built a repuation as one of the leading tech hubs in the UK, with computing and health tech representing particularly strong sectors.
In 2016, Oxford Sciences Innovation (OSI), the investment arm for the university’s spinouts, grew to £580 million. At the same time, the commercial side of the university — Oxford University Innovation — launched 24 high-tech firms, while raising £52.6 million in seed stage funding. Of those 24 firms, 21 were offshoots from the university, including; OxStem, Mind Foundry and EnzBond.
One of the major success stories from Oxford — confirming the city as a tech hub – has to be the computer software company Sophos, which achieved the largest IPO for a UK software company in 2015, and now has more than 100 million users in 150 countries relying on its security solutions.
>See also: Technology dominates Autumn Budget as key to UK’s growth
Cambridge is similar to Oxford, in that it has an internationally recognised university, and it is second, only to Oxford, in the number of academic research associations relating to clinical medicine.
According to the 2017 Tech Nation report, there are 30,219 people employed in technology jobs in Cambridge, and on average — between 2011 and 2015 — 353 startups were created in the city each year.
However, where the city differs to hubs like Edinburgh, is in the talent pool. There isn’t a lack of talent emerging every year from Cambridge University. However, they are not matching with the local start-ups and businesses in the area.
Fiona Nielsen, founder and CEO of genomic data platform Repositive, said she is yet to hire, or even interview, people from the Cambridge University pool of local talent. The University of Essex, according to Nielson, has a good relationship with Cambridge-based startups, but this can’t be said of the city’s own university.
This area could be improved, and connections built. However, the city represents a significant tech hub in the UK.
Cambridge’s tech sector is worth £2.4 billion, and is home to 1,500 tech businesses – Europe’s largest technology cluster.
‘The growth of Cambridge’s tech sector,’ according to an article from JLL, ‘has also led to the creation of some of the city’s most innovative workplaces, including Microsoft Research and Amazon’s offices near the station and the Bradfield Centre on Cambridge Science Park.’
>See also: Silicon Valley: Here’s why China is the next global home of tech
According to the 2018 Tech Nation survey, 79% of the Cambridge tech community think the scale of tech businesses will expand in the next 12 months, while 84% believe the number of tech businesses will increase.
As the Northern Powerhouse becomes an increasingly attractive destination for tech start-ups, could London suffer from a brain drain?
Manchester
Manchester is the largest technology hub in the UK outside of London. The city has a range of tech-led businesses and startups, but it’s IoT community stands out from the other tech hubs in the UK. Indeed, Manchester ranks the highest for startups that focus on IoT tech. This emphasis on IoT is reflected by Cisco’s 2016 launch of an IoT innovation centre in Manchester, which looks at building smart city projects.
Manchester is somewhat different to the other cities in this article, however, experiencing more development, growth and what some would call a rebirth over the last 20 years; following the 1996 IRA bomb in the city centre. It is now, arguably, the UK’s second city.
Sir Howard Bernstein, the Manchester council’s chief executive, is largely credited with leading this transformation and helping bridge the private and public sectors.
He said: “Over the past 40 years, I’ve witnessed a dramatic change in Manchester’s local economy. But today, the city is on the verge of assuming its potential as a global leader in the digital economy.”
“The public and private sector has to work together to ensure that every Mancunian business has the opportunity and resources to reach its potential.”
The close links to the universities in Manchester, like many of the other cities in this article, is a significant factor for attracting technology companies to the city.
>See also: What UK cities need the most digital investment to solve urban
Indeed, the growing reputation of Manchester’s universities – among other factors – is seeing tech companies flock to the city, and the tech sector accounts for nearly half of all enquiries for city centre office space.
Bristol and Bath
This region has a strong history with technology, specifically relating to aerospace and microchip design, and global businesses from these sectors are established here, such as XMOS and Cray.
> Bristol and Bath has a strong history with technology surrounding aerospace and microchip design. The area is now a thriving, modern tech hub in these spaces and more. – Tech Nation
However, the region is now attracting a greater range of technology companies and start-ups. Robotics, in particular (in part spurred by the internationally recognised Bristol Robotics Laboratory), is a fast growing sector in the Bristol and Bath area. This is illustrated, according to Tech Nations 2017 report, ‘by a multimillion investment in GraphCore, while Future Space hub has also opened, attracting UK robotics stars.’
The region is now a growing technology hotbed, with start-ups and more established companies increasing emerging. Indeed, Oracle chose Bristol to host one of its new global Startup Cloud Accelerators.
Again, the role of universities plays it’s part in the development of this UK tech hub, and the Bristol and Bath area has a number of notable institutions: University of Bristol, University of Bath, University of West England and Bath Spa University. Here, digital skills are developed and the students approached by the incoming and established tech start-ups and companies. The region is also home to a number of tech hub events or meet-ups, including Techspark, High Tech Bristol and Bath, and Venturefest.
Despite not having the largest employee-base, with only 26,999 tech jobs, digital tech business turnover is upwards of £7.9 billion in the area.
UK leads Europe in scaleup investment, according to Tech Nation
Conclusion
There is a clear trend here that defines a successful tech hub in the UK; the presence of renowned universities that attract world class talent, who can be cherry-picked by the technology companies located in the area.
Some cities mentioned, like Manchester, are associated more closely with specific technologies. However, in general, the tech hubs mentioned have a range of businesses offering a variety of services, all with the same goal of innovation.
It is evident that there is a healthy mix of both established technology companies and an increasing number of tech start-ups across the tech hubs in the UK.
The only thing holding back the continued growth of these tech hubs is the digital skills crisis currently facing Britain and the rest of the world. However, there is a strong emphasis from both public and private sectors to reverse this crisis and fill the roles of the increasing number of technology jobs available. Addressing diversity issues is critical in this fight, getting more girls interested and involved in STEM subjects at both school and university level.
