Taking Manchester’s tech success beyond the UK and into Europe

In recent years, Manchester has proved a popular relocation destination. In fact, a huge 68,000 people left London between August 2013 and June 2014 to move up to Manchester. But it’s not just the cheaper housing, music scene, nightlife, arts, and attractive work/life balance that are attracting people to the region. We’re fast becoming known for something else: our thriving tech sector.

The UK’s tech industry is growing rapidly, with recent reports placing direct employment in tech in Manchester at 52,000 – second only to London. However, if we include those working in ancillary industries, we know this is more like 85,000.

The government has now started to appreciate the economic potential of the North and the huge contribution that its tech scene makes to the nation as a whole - Manchester is the largest economic force in the North, contributing 28 percent of GVA to the region.

In addition, this year Manchester was voted the best European location to do business – clearly its significance is international, not just national: further proof that we can reach beyond just the UK, and make a real impact in the European tech scene, too.

What sets Manchester apart

Manchester has a number of unique characteristics that set it apart from other cities in the UK, which is giving us the opportunity to have an impact globally. The industrial revolution saw us play a significant role in the textiles industry, which is still reflected in today’s tech ecosystem; digital start-ups are setting up shop in old cotton mills, and textiles and fashion still remain important, with the likes of international, online only, fashion brands like Missguided and Boohoo home-grown here.

We also have a strong broadcast history dating back to the 50s, as home to Granada studios, and Poptel, one of the UK’s first ISPs was founded here in Manchester. This convergence of heritage industries, along with early adoption of digital technologies, has created the perfect platform for Manchester to develop a global reputation for expertise in digital and technology.

And others would agree with this sentiment. In a report by Oliver and Ohlbaum Associates prepared for Manchester City Council in 2012, a group of independent experts said that Manchester had the building blocks in place to become a huge success and compete with some of the world’s leading digital destinations.

They noted that they believed we were a real contender to become one of Europe’s most important digital centres. The report also praised our ‘get it done’ attitude and genuine momentum - something that is undoubtedly another attraction for a lot of businesses setting up in Manchester. That was four years ago, and we’ve come a long way since then.

Manchester is best placed to take a lead in Europe

I have no doubt that Manchester can, and will, become a key European tech destination in coming years. The region’s tech scene has a £2.2bn output and in a 2016 study Manchester was ranked as the number one destination in Europe for the cost of doing business. Investment bank GP Bullhound last month reported that the North of England alone now has 11 tech companies valued at more than $1 billion – more than in some other thriving European cities in Sweden and Germany.

In addition, the new £61 million Graphene Institute that calls Manchester home will make the city a world leading knowledge base in graphene and commercialisation, enabling us to create smart products that will revolutionise our lives. This will not only have a positive impact on jobs and investment in the region in coming years, but also put us on a more global playing field.

In addition, our geographical position - sitting at the centre of other smaller dynamic clusters such as Liverpool, Newcastle, and Leeds – and close proximity to London means we’re in a very good position to adopt a leading role in developing the tech scene.

Proposed government investment into our transport infrastructure - HS3 and 'smart motorways’ - will only strengthen this position. Add to this, the fact that Manchester airport already flies to more places than any other regional airport - with 220 destinations in total – making us easily accessible from all major business locations across Europe.

Our thriving tech businesses

The successful businesses we’ve grown here, plus the ones we’ve seen move here recently, are a big indication of the clear vision in place for Manchester’s tech sector. We can already count The Hut Group, Sage, and On the Beach as top tech businesses based in the North, while Sainsbury’s and Bet365 have recently moved tech teams into Manchester, as they realise the opportunities. Our home grown businesses are what set us apart, and we can now boast a number of companies operating out of the region on a national and international scale:

The Lad Bible - the website whose content is shared across Facebook, Twitter and Reddit by its 17 million+ followers – was founded here in 2011 by 24-year-old CEO Alexander Solomou. Based in Manchester city centre, it’s a business that lives and breathes tech. Born on social media, The Lad Bible has grown rapidly from a small-scale online content creator, into a fully-fledged institution, which has spun out the likes of The Sports Bible, and The Food Bible.

Another Manchester-based business that has grown massively to become one of the UK’s leading event ticketing platforms is Fatsoma - founded in 2007 by three Manchester Met University students. The business now has over 30 members of staff, and as a result of a six-figure funding sum from Natwest last year, continues to experience accelerated growth.

Manchester is also home to PushDoctor, the on-demand video GP consultation service. The business is one of a growing number in the region to secure funding ($8.2million in fact). This, coupled with a strong business plan, has seen the company fly.

Clearly, we’re well on our way to becoming a key tech destination in Europe, but there are currently a number of obstacles that are slowing the speed of progress.

Our current barriers to becoming a European tech leader…

As it stands, a number of the Manchester-based companies that have been successful in getting investment have gone outside of the region to get it. Funding and venture capital has traditionally been hard to acquire in Manchester and many businesses are have gone to London or overseas to raise the capital they need to grow,. However, we have a growing number of success stories that are starting to change that.

Crowdfunding platform Crowdcube recently opened a Manchester office and hopefully other investment firms will follow. High net worth individuals that found their success in Manchester are also starting to invest back into the region, as they begin to see the potential of capitalising on our tech businesses. I hope this is something that develops further as the industry grows.

We’re also suffering from a worsening skills shortage that is further threatening our development. We simply can’t continue to grow if we have to turn away business because we don’t have the talent or resource to actually carry it out. Our 2016 Skills Audit found that 37 per cent of our members have had to do this in the past 12 months because of difficulties with recruitment. Being home to the largest student population in Europe, businesses in Manchester now need to do more to retain this talent in our region.

The fact that we recognise these weaknesses is a strength in itself, and the region is lucky to have businesses, professionals and individuals actively working to shift these barriers before they affect our businesses. Ultimately, there has never been a more exciting time to be in the North.

We have so many businesses in the industry eager to work together to make the region a global tech destination. We now must harness that and use it to help our start-ups, and scale ups. We must ensure that we are developing a big and broad enough pipeline of talent, and work to upskill employees effectively. It is these changes that could be the difference between Manchester being good, great, or a tech leader. So with the opportunities standing directly in front of us, what’s to stop us?

Manchester Digital is the independent trade association for the thriving digital sector in the North West of England.

This story, "Taking Manchester’s tech success beyond the UK and into Europe" was originally published by Techworld.com.


Copyright © 2016 IDG Communications, Inc.

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