Lack of talent and lack of physical space – that’s what is hampering the growth of the tech sector in Newcastle. That’s according to a panel of local industry representatives, who shared their views at the Newcastle leg of Tech City UK’s Tech Nation tour.
The panel was largely complementary about the report, but, off stage, audience members grumbled of its shortcomings, noting, for example, the absence of some key local tech firms, meetup groups and industry issues.
One thing the report did highlight was the poor supply of tech talent in the region – a mere 22% described talent supply as ‘good’.
Gilbert Corrales, CEO of music discovery and fan engagement platform Leaf.fm, agreed, stating he’s found the search for talent “challenging”, and admitted he ended up using the Tech Nation Visa scheme to hire three developers from overseas.
This skills shortage isn’t unique to Newcastle, or indeed the North East. One of the key takeaways from this year’s Tech Nation report is that startups across the UK are struggling to find employees with the skills required to build out their tech and accelerate their growth.
But what’s the reason for the shortage in Newcastle, specifically, or rather what can be done to remedy this?
Deb McGargle, chief legal officer at startup SeedLegals, said it’s in part down to the disconnect between the university and business community in the city.
I should explain at this point that McGargle is also entrepreneur in residence at the Ignite accelerator in Manchester and previously served as a mentor lead at Techstars over in Boston (Massachusetts, not Lincolnshire…).
“Boston has a much more conjoined [tech] community, which means they have a fantastic, supportive ecosystem,” she said, noting that Newcastle is making strides towards this, but still has quite a way to go.
“I started a company 15 years ago and I do volunteer to go in and talk to students, but no one approaches me to do it,” said Steve Caughey, CEO of software company Arjuna Technologies, and Tech Advisor for Newcastle’s Cloud Innovation Centre.
He believes the universities should be more proactive in forging connections between the student population and the business community, perhaps creating active mentoring and internship programmes.
Mawdsley, however, sees it as more of a two-way street. “There needs to be more dialog between the universities in the region and businesses about what exactly is useful. So what does education need from business and what does business need from education?”
McGargle highlighted the upcoming Newcastle Startup Week as a prime example of the kind of activity the city and region needs more of – events and initiatives that bring together startups and budding entrepreneurs with successful local tech companies and industry experts.
Real estate shortage
The panelists said the tech community also needs more space in the heart of Newcastle – those involved in the industry are currently dispersed across the city, which means there’s not as much cross-pollination of ideas and expertise as you might find in some of the UK’s other tech hubs.
“Space is a huge issue,” said Mawdsley, “it’s totally over-developed here. Businesses that come here see that there’s no room for them.”
“We have amazing connectivity. We have cheap housing – we have a lot of benefits, but space is the real issue,” he added.
There are workspaces in the city that house plenty of tech companies, such as Campus North, The Core (where the panel event was held) and Hoults Yard, but they’re all full, the panel said.
“Lease lengths are an issue too,” said Corrales, “when you’re a high-growth tech company, having to sign a five-year lease is an issue. You need the flexibility to be able to grow.”
Alasdair Greig, director of Northstar Ventures, a VC firm with over £100m under management that focuses on businesses in the North East of England, was also on the panel.
“Ten years ago when I arrived here there was very little VC and angel funding, but we have moved on from that, as a region. More and more funders from the South East and America are spotting the opportunities and coming here,” he said.
Greig believes one reason the area is often overlooked as a tech hub is because it lacks a decent list of companies that have completed large exits.
“Several companies in the North East are global leaders in what they do, but we’re missing that last part of the jigsaw puzzle – those exits that will really put us on the map and give us recognition.”
I want to stress that the discussion wasn’t all doom and gloom. It was clear the panelists – and moderator Herb Kim, founder and CEO at Newcastle tech conference Thinking Digital – were all fiercely proud of their local tech ecosystem and keen to celebrate its successes. They were delighted the report shows Newcastle has a GVA of £1bn, employs over 20,000 people in digital jobs and births an average of 211 tech startups per year. Their complaints were merely borne out of a sense of frustration as they see so much potential in their tech community that’s just waiting to be untapped.