Can Nick Clegg's Tech North initiative transform northern England into the next Silicon Valley?
The northern powerhouse is getting techy.
Last week, Nick Clegg unveiled 'Tech North', a new initiative to coordinate the growth of digital expertise in Leeds, Manchester, Sheffield, Liverpool and Newcastle. Tech North wants to achieve what Tech City UK has done for East London – put the North of England on the international tech map. For this, Tech North will work closely with UKTI to attract inward investment. Its ambition: to rival San Fransisco, Berlin and Shanghai.
What can Tech North realistically contribute to transform the North of England into the next Silicon Valley?
Northern England’s tech clusters have already been put on the map. Nesta’s dynamic mapping work identified Liverpool and Sheffield as thriving hubs for game developers; BVCA uncovered strong life science clusters not only in Cambridge but also in Manchester and Policy Exchange published a range of policy recommendations to turn northern clusters into Silicon Cities just a few days ago.
What the North is missing however, is a strong international brand. Tech North will provide this. Its cousin Tech City UK, launched by David Cameron in 2010, had long been criticised for neglecting digital clusters outside the capital. A new organisation that encompasses a whole region rather than a city in its name will help UKTI to create a narrative around a ‘cluster of clusters’ in the North, where entrepreneurs and investors can find a range of specialisations and complementary strengths.
Branding is obviously not the only requirement for a northern powerhouse. Successful clusters require a range of ingredients, from broadband to travel infrastructures, from skilled labour to local leadership. When tackling these issues, Tech North should consider three key points:
Remember, tech is more than digital.
Tech North is (yet) another initiative to champion digital clusters. While digital technology is revolutionising all sectors, the interests of digital companies are already represented by a range of organisations within the UK – such as Tech City UK's Cluster Alliance or Coadec – as well as on a European level through the European Digital Forum or Allied for Startups. A look beyond digital reveals that the UK hosts a range of science based, hard-tech companies and high-growth businesses. Sectors such as medtech or electronics provide northern cities with a competitive advantage over London. Can Tech North champion its cities as a place where various types of technology can thrive?
Ask yourself ‘what does success look like?’
Access to finance is at the top of Tech North’s agenda. Funding is indeed repeatedly mentioned as a key challenge for digital startups. However, Tech North’s success measure should ultimately be economic growth. Research supported by Nesta suggests that economic policy makers best focus on helping high-productivity businesses to scale up - in other words, rebalance attention from startups to scaleups. (If you now ask yourself what a scaleup is, check out the Startup Europe Partnership blog). A major barrier for scaleups is access to skilled talent, which means that attracting and retaining talent should be a key priority for Tech North. Companies like game developer Outplay Entertainment are not alone in reporting about ‘the challenges of convincing people that they’d want to move up north'.
Get in, but do not get in the way
Tech North is modelled on the success of Tech City UK. Not everyone is convinced that the latter had the impact government likes to take credit for. East London’s startup activity was already flourishing in the late 1990s. The key drivers of Tech City’s success were people – individuals and teams setting up startups, accelerators and coworking spaces. Likewise, it was grass-root initiatives, active angel investors and exited entrepreneurs that propelled Cambridge to the top. Each government initiative should carefully consider where it can add value and where it would hinder innovation. Going forward, Tech North should consciously focus on the levers it can use to create good framework conditions for tech companies to thrive in. This includes listening carefully to local needs, tearing down regulatory barriers (for example through red tape challenges) and importantly ensuring local political tech leadership.
With these points in mind, can Tech North rival Berlin and Shanghai?
This will take time. Tech clusters do not magically appear. What we can learn from Silicon Valley, Berlin or Tel Aviv is that they grew organically over many decades. It will equally take time to create major success stories and produce a generation of successful entrepreneurs who feed smart cash back into northern clusters. Until then, Tech North can learn not only from the stories of other cities and initiatives but also follow the lean principles of the tech companies it will support: build a minimum viable service, measure its suitability by listening carefully to your stakeholders, and learn from your mistakes without being afraid to experiment.