The UK is home to many growing startup clusters yet if the tech industry is to continue to flourish, more still needs to be done to provide better support networks and affordable workplaces.
Entrepreneurship thrives in vibrant communities – whether big or small, local, national or global. Linking up with peers is a valuable way to drive innovation and navigate this fast-changing industry.
Owen King, Director of Corporate Research at JLL, says: “Sharing experiences and challenges with peers and learning from each other’s experience is an important part of building a business. The desire of entrepreneurs to locate alongside their peers has led – quite organically in some cases – to the development of some highly successful tech communities.”
Over the past year, every UK region has seen an increase in new startups, data from Companies House shows. Firms want to be based in locations that offer easy access to their peers so they can gain the insights they need to develop UK-wide and global connections.
They also need flexible, affordable office space, which is in short supply in the UK amid record-breaking levels of take-up in cities such as Birmingham and Cardiff in 2017, along with fast broadband connections and access to skilled workers according to the 2018 Tech Nation report.
Growth of tech towns and suburbs
For some startups, especially those working in the fields of software, electronics and biotechnology, this means basing themselves in and around established tech communities like Oxford, Bristol or Cambridge.
These clusters have strong links to the research-intensive universities within the cities and a ready pipeline of skilled graduates. Workers see them as appealing places to live with lower housing and living costs and shorter commute times than London.
New clusters are also starting to make their mark. Tech towns and ‘silicon suburbs’ are forming in locations like Reading, Telford, Stafford, Slough and Heathrow, Swindon and Burnley. These communities can be small initially – sometimes a tech company sets up inside the office of the firm they are working for – but as others learn of their work, they can quickly grow.
“We’re seeing the rise of areas like ‘fashion-tech’ or ‘manufacturing-tech’ in parts of the North of England, which are emerging as technology pervades into established industries. Companies across all sectors are looking for ways to enhance their digital capabilities and drive innovation, so I think we’ll see a lot more of these hybrid tech communities springing up,” King says.
Meanwhile, multi-nationals like Microsoft, Oracle and Cisco Systems have been attracted to Reading because it is close to London and Heathrow airport but space is more readily available and rent is cheaper than in central London. In turn, a growing startup community is forming, keen to tap into their expertise – and new real estate developments are springing up.
The University of Reading recently opened its Gateway building, which will be part of a larger science park, and provides flexible space for tech-led companies and startups. Central Working is also setting up a new hub for tech and innovation in the town center along with a further club in nearby Slough. Further north in Burnley, the Vision Park development is marketed at the area’s growing tech firms.
A growing tech sector
The nation’s tech sector is worth nearly £184 billion and employs 1.07 million people, more than any other European country – and it’s growing. Data from Companies House indicates over 10,000 tech businesses were incorporated in the UK in 2017, up almost 60 percent on 2016.
To cater for this growing demand, King says there is a need to provide more mixed-used workspaces that can allow start-ups to flourish, whether through building new purpose-built developments or refurbishing older buildings.
“There’s huge, underserved demand for high quality, affordable workspace where firms can co-locate with their peers,” he adds.
“One of the biggest challenges faced by the UK’s tech communities is the availability of affordable workspace in locations with deep pools of talent. Providing fast, reliable broadband is also key, as this is one of the top requirements for digital firms.”
With growing competition from tech hubs in Central and Eastern Europe as well as the likes of Paris and Berlin, putting in place the right digital and real estate infrastructure for startups to thrive has never been more important. And while not every startup will turn out to be a $1 billion unicorn like Deliveroo, virtual world developer Improbable or fashion retailer Boohoo.com, creating communities that enable entrepreneurs to tap into local expertise and support networks can go a long way in helping them to grow and get their products and services into the global tech market.