Region already leading the way in deep tech but needs to close investment gap with London and the South East
From left: Tracey Johnson from TECH SY, Ana Avaliana from the Royal Academy of Engineering, and Tom Adeyoola from Innovate UK at the Northern Tech Summit(Image: Adele Drummond Photography via Northern Tech Summit)
The North is not ‘waiting to be rescued’ and will be a global tech powerhouse if its cities and companies work together – that was the call from researchers and tech leaders at a global showcase.
The Northern Tech Summit at Sheffield’s Crucible Theatre saw leaders from the North East, North West and Yorkshire & Humber come together to promote the successes of Northern tech.
They were backed by a report from Dealroom unveiled at the event which showed the North’s tech sector was worth almost $73bn (£54.2bn), which researchers say is more than the equivalent sectors in Italy and Norway. The region’s universities launched more than 500 spin-out companies over the last year.
A quarter of all UK tech startup businesses in advanced manufacturing and engineering were founded in the North during the last 12 months. Meanwhile the region is also bucking the UK trend in “deep tech”, with the sector recording a 10% growth, compared with an overall decline of 23% across the UK.
But the region’s tech firms still face a big challenge in securing investment. Dealroom’s research showed Northern firms accounted for just 3.7% of venture capital investments across the UK – compared with 71% in London and 12% in Cambridge. And some 61% of investments into northern tech firms came from UK investors, compared with 32% across the UK.
Speakers at the summit called for UK businesses and political leaders to work together to promote the North and to drive more investment there.
Tom Adeyoola, executive chair and CEO at Innovate UK, said: “It’s no coincidence that the North of England was the birthplace of the industrial revolution. Today, the truly innovative and pioneering work being delivered by tech start-ups in Yorkshire, the North East and North West, coupled with the groundbreaking research being delivered in our great northern universities, has the potential to be at the forefront of shaping industries such as advanced manufacturing, robotics and life sciences. Yet all too often this work is hindered by a lack of access to opportunities.
“There is less distance between Liverpool and Sheffield than the length of the Elizabeth Line in the South East. Yet all too often regions are forced to compete against each other when it comes to securing access to funding, rather than working collaboratively to break down the barriers that are preventing business ideas developed in the North from achieving their full potential, particularly when it comes to trading globally.”
Yoram Wijngaarde, co-founder at Dealroom, said: “The report we have published today illustrates the strength, depth and immense opportunity for the northern tech sector. The region as a whole is proving that it can compete effectively on the global stage. Yet the report also indicates that collectively, businesses based in the region often struggle to secure the vital investment needed to start up, scale and break into international markets, with access to funding and venture capital being a major barrier to unlocking those ambitions.
“A startup founded in London is five times more likely to secure investment than one based in the North.
“The data also reveals that at every stage of a company’s investment and funding journey, businesses in the North tend to receive smaller amounts of money than those based in London and Cambridge. The value of investment received by businesses in the North is at a level that was seen 11 years ago in London and 5 years ago.
“Yet what those statistics in our latest report don’t show is the truly pioneering and innovative work being undertaken in the region. The North is successfully bucking the UK trend when it comes to investment in deep tech, whilst the pioneering work being delivered in sectors such as advanced manufacturing, life sciences and fintech sectors are creating opportunities within the region. Breaking down barriers to securing investment will place the North at the forefront of the next generation of technological innovation, both nationally and internationally.”
Ana Avaliana, director of enterprise and place at the Royal Academy of Engineering, said: “Let’s be clear, the North is not waiting to be rescued. It is home to world-class research that is transforming our relationships with technology.
“The North lacks connectivity, and events like the Northern Tech Summit illustrate that when we all work collaboratively, it’s not just the region that benefits but the whole of the UK economy. All too often deals are viewed on an individual basis, rather than understanding the broader picture, and we need to follow the example set in the US that brings together shared networks, shared intelligence and adopting best practice to build an ecosystem in the North of England that is capable of competing more effectively on the global stage.”
Tracey Johnson, project director at summit organiser TECH SY, said: “The messages delivered by entrepreneurs, investors and those working to support the northern tech infrastructure were clear: if the region is to successfully compete on the global stage, we need to collaborate and build an ecosystem that brings together the wealth of talent and expertise from across the North.
“No single city can realise the North’s full potential in isolation. Greater collaboration, a stronger collective voice and a shared commitment to championing the innovation taking place across the North will be critical to securing its place on the global technology stage, and I hope that the Northern Tech Summit will mark the beginning of that journey.”