It's grim up North, so why are so many start-ups bedding down there?

I’ll start by saying this. London’s world-renowned status as a hotbed for tech talent is well earned. London is often seen as the gateway to the European tech scene; it’s ranked as the top European hub for global tech investors, it’s the number one choice for European and global tech professionals looking to work abroad and is a serious player in FinTech, Artificial Intelligence, and Big Data, fiercely rivalling both New York City and Silicon Valley. Over the next ten years, the number of digital tech companies in London is expected to rise to 45,000, pumping more than £12 billion into the UK. Oh yes, London’s tech sector is very much alive and well.

But London isn’t the only flourishing tech centre in the UK. True, London still dwarfs the rest of the UK with its staggering digital tech turnover of £64.1bn (compared to Manchester’s £3.2bn), but heavy investment in the Northern Powerhouse – including my hometown Manchester – has seen a new rival emerging on London’s doorstep. In 2016, nearly 2,000 businesses were set up in just 12 months in the city – an increase of 10% and well ahead of the national average (4.3%).

Last year was the strongest year on record for Northern tech investment, resulting in a year-on-year growth of 2090% since 2007. As for Manchester, the city has the highest economic growth in the country, accounting (along with neighbouring Cheshire) for 50% of investment in the North every year.

And while London is still the preferred choice to launch start-ups, 24% of IT decision makers would choose the Northern Powerhouse over the Capital – with 33% of those currently based in the North preferring Manchester. While London is still a force to be reckoned with when it comes to tech start-ups, in the last decade there has been a significant shift in the power balance.

If London is an established tech centre, the Northern Powerhouse is a disruptive force, and SMEs and start-ups are paying attention. So, what’s inspiring them to turn from the Big Smoke to the Northern Powerhouse to launch their business?

1. Talent shortages aren’t so short any more

For decades, the North has lost its homegrown talent to southern prospects. And while access to talent is still cited in the top three challenges faced by start-ups in Manchester city, the gap isn’t quite as pronounced as it once was. In fact, tech workers choosing where to live are almost as likely to say Manchester (15%) as they are London (18%).

With three leading universities generating fresh talent every year, a growing reputation in the industry and large household names like the BBC and ITV Granada moving in, talent has also migrated northwards.That’s not to mention that the North has started carving out new market sectors to specialise in, for instance within energy, IoT, data analytics, software development, and cyber security, as well as within digital, AR, VR, animation, and media production.

Manchester is primed to become a pioneer in developing a Smart City at scale. This will encourage some of the smartest and most innovative minds into the city doors, while ensuring that Manchester’s economy is developing for the future. In the last ten years, Manchester’s population size has
grown by 20% and it is estimated that by 2030, 600,000 people will call Manchester home.

Lorien’s first Tech Meets Talent event - a networking event that connects cutting-edge organisations with high calibre, niche talent - served to highlight the depth of experience within the city. It proved that with the right knowledge and understanding of the market, high quality candidates can easily be found north of the M25.

2. Investment opportunities

It’s certainly true that access to funding up North isn’t as mature a market as in London, which can prove a problem for start-ups. Many venture capitalists (VC) and business angels (BA) are still London-based, while business accelerators and incubators are significantly more immature – access to funding is cited as one of the biggest challenges start-ups face in Manchester. However, as trade grows up North, so is investment and a savvy start-up can easily find the funding they need.

Investment is coming in from all angles, including the £400m Northern Powerhouse Investment Fund (NPIF), the North West Fund (a £155m evergreen investment fund and one of the most prolific VC investors in the UK, having supported 440 businesses already), and the Greater Manchester Investment Fund (GMIF). The Manchester Growth Company, meanwhile, acts as an Avenger-style unit, with specialists brought together to grow Manchester’s economy. This includes award-winning investment agency MIDAS, Business Growth Hub, Department for International Trade (DIT), and Business Finance Solution (BFS).

There are two main angel networks in the region - Northwest Business Angels and Angels Den - and a number of accelerators including Idea Alive, Ignite, and Dotforge. Crowdfunding has also become a popular alternative for start-ups looking to make it big in the city, with platforms including Crowdcube opening Manchester-based offices to increase their portfolio.

Of course, investment isn’t purely financial and 77% of tech companies say they benefit from access to entrepreneurs. Manchester has a thriving community for start-ups; with networking, meet-up events, and collaboration services laying testament to the myth that the north is friendlier than the south. In fact, Manchester’s helpful tech community is ranked the number one benefit by start-ups, according to Tech Nation.

From one-to-one mentorships, professional training, or just the opportunity to swap ideas, Manchester covers all bases with events and meet-ups. And these include HackerNest, CodeUp Manchester, BLAB, Northern Soho, SheSaysMCR, The Pulse, Silicon Drinkabout Manchester, Venturefest Manchester, and Business Rocks.

3. Infrastructure

An international airport, modernised tram system, bus network, and a train that can get you to London, Birmingham, Leeds, and Sheffield in just over two hours all help to make Manchester as accessible as possible to the rest of the world. And with HS2 currently in the pipeline, Manchester is set to become one of the most well-connected locations in the UK.

Investment from the Urban Broadband Fund project is also set to launch Manchester as a “supercity”, with ultra-fast broadband enabling businesses to move traffic faster, cut costs, and remain competitive in the global market.

Now, let’s talk about workspaces. From the gritty Northern Quarter to the futuristic city vibes of the £950 million MediaCityUK development in Salford, the city is thriving with new environments to launch your business. In recognition of the volume of smart-ups, a number of flexible, co-working spaces are popping up, including TechHub, the Sharp Project, The Greenhouse, Innospace, The Landing, and Manchester Science Park – which is home to more than 120 innovative science and tech businesses.

Outside of digital, Rise Manchester - a Barclays’ open innovation programme - had become the home for local FinTech companies. Irrespective of the maturity of your business journey, Manchester has the capacity and the culture to accommodate.


Of course, it’s not all plain sailing for the Northern Powerhouse. With Brexit looming on the horizon, it’s an uncertain future for everyone, and Manchester will need economic stability in order to continue its growth trajectory.

For the time being, the project has been side-lined from discussion. But I’m an optimist. I believe the Northern Powerhouse is the product of a much-needed conversation to re-balance wealth and opportunity in the country and something that - even without the government’s focus, temporarily - will thrive and grow.

As businesses, we need to recognise the enormous potential there and take action; our investment has already created change and if we can continue to invest, to start-up and scale-up outside of London, I am very excited about what we can create.

With organic and strategic business growth, investor backing, robust infrastructure, and both grassroots and evergreen talent communities being nurtured, this region has a lot of promise. That’s why, for me, building your business empire in the North is a no-brainer – and if I were a start-up or an SME, I’d be doing the same. 

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