Among fierce international competition, UK tech is punching well above its weight. A recent Tech Nation report found that based on the relative size of the UK economy last year scaleup tech investment was 2.5% higher than would be expected, that an astounding 35% of Europe and Israel’s 169 unicorn tech companies have been created in the UK, and that the UK had more total venture capital investment (£6.3bn) in tech than any other European country.
Even for non-tech firms, it’s clear that there’s a strong link between investment in technology and growth. A recent report from the Yorkshire Bank surveying 2,000 small business owners and entrepreneurs found that of the UK’s ‘tech-led’ businesses, “44% have experienced growth in the last year, compared to only a third (33%) of businesses that don’t put technology front and centre.”
“The most tech-savvy SMEs outstrip their peers in terms of growth, ambition and investment,” says Gavin Opperman, Group Banking Business Director at CYBG. “Online platforms enable even the very smallest businesses to enjoy national and international reach, with 59% of businesses saying that technology has enabled them to expand internationally.”
While London remains the tech hub of the UK, other entrepreneurs are increasingly drawn to other cities to start up a technology business. The Tech Nation report found that the East of England has experienced the biggest increase in capital investment across tech companies, at 206%. London comes in second, with an increase of 106%, followed by the West Midlands and Yorkshire and the Humber (54% and 51% respectively).
But Yorkshire and the Humber might be on the brink of a lot more. Aspiring entrepreneurs looking to start a tech company think Manchester is the place to be, as the city is increasingly seen as a stiff competitor to London. The Tech Nation report found that London and Manchester attract similar levels of B2B payments, on par with Walnut Creek in San Francisco and Burlington in Vermont. In terms of SaaS (Software as a Service) investment, Manchester most resembles Toronto and Atlanta, big cities in North America that offer a more livable alternative to Silicon Valley. The city as a whole has similar investment trajectories to St Petersburg and Budapest, according to the study.
Manchester has the most positive entrepreneurial spirit in the UK, with the Yorkshire Bank survey finding that business owners in Manchester rate their city very highly (63%) in terms of business community, compared to the national average of 47%. Partly because of this, the report also found that Manchester business owners care more about their environment than business owners in other UK cities.
“Manchester stands out as a notable bright spot in the results from the country’s 10 biggest cities,” says Opperman, “Organisations like The Growth Company are generating investment and growth in the area, and business hubs are helping Manchester SMEs to reach their full potential.”
It’s not just business driving the tech boom in the city, it’s also Manchester’s strong university scene – particularly The University of Manchester and Manchester Metropolitan University – that attracts and educates potential entrepreneurs and their employees.
With a tech buzz that’s competing with London but with rent at half the price, Manchester is already the new tech entrepreneurial hotspot of the UK. At a speech in the city, Prime Minister Boris Johnson spoke of being able to “look back at centuries of progress, [at] the inventions, ideas and breakthroughs that came out of Manchester”. Given that it was the beating heart of the textiles scene during the industrial revolution, who says that today Manchester won’t once again lead the world?