I’m a proud Northerner and a proud tech enthusiast, so I’m delighted to write this piece, which covers both these passions of mine. But enough about me. Let’s look at the North of England-related findings from Tech City UK’s Tech Nation 2017 report.
The report features 30 towns and cities, including eight in the North of England – Manchester, Liverpool, Leeds, Sheffield, Hull, Sunderland, Newcastle and Middlesbrough.
The tech communities of the eight city clusters across the North have a combined Gross Value Added (GVA) of £5.8bn, so they pump £5.8bn into the economy after their cost of operation is taken away. Last year, the combined GVA was £4bn (although it’s worth noting Middlesbrough didn’t make it onto the list in 2016).
Across the eight clusters, a rather exact 168,671 people are employed in digital tech economy jobs, with some 1,973 startups born each year across these locations.
Here’s a quick summary of the findings from each of the eight clusters.
According to the report, there are 6,914 digital tech economy jobs in Hull, with the average advertised salary for those working in this sector sitting at £34,895. This is £4,530 higher than the average advertised for non-digital jobs.
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The GVA of the city’s tech sector averaged £254m from 2013-2015 and the number of digital tech businesses increased 21% from 2011-15.
Digital business turnover in Hull grew a rather lacklustre 2% from 2011-2015, and only 45% of tech workers there said there is a good talent supply available. Regardless, house prices average at £133,319, so that’s something to smile about. Also, 71% of those surveyed said they experience a good quality of life.
Some 23,734 people are employed in digital tech economy jobs in Leeds, with an average advertised salary of £50,041 – significantly higher than the average non-digital wage of £34,005.
Digital GVA in the city averaged £688m from 2011-2015, with its number of tech businesses increasing 29% from 2011-2015. Digital business turnover increased 14% from 2011-2015, which pales in significance to the likes of Manchester (45%) and Newcastle (40%), but is still not the worst of the bunch.
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An average of 314 startups were born in Leeds each year from 2011-2015 and with £3.7m set to be ploughed into the sector, courtesy of Leeds City Council, this could well increase significantly over the coming years.
Talent supply in the city was only rated ‘good’ by 28% of those in the sector and only 29% said the transport infrastructure was good. But they’re a hardy bunch – 84% said they have a good quality of life and 92% said digital growth optimism is good.
Lack of talent seems to be a big problem in Liverpool, too, with just 28% of tech workers there stating that the supply of skilled workers is ‘good’. 83% say they have a good quality of life, though, and 79% say they’re optimistic about digital growth in the area.
As it stands, digital business turnover increased 22% from 2011-2015, with the number of digital businesses in the city increasing 29% in the same period.
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Salaries are good, at an average of £45,011 for those employed in the digital tech sector (those in non-digital are on an average of £32,994).
“Being a creative technology business, it helps massively to be located in a place that has character, feels vibrant, is in a good location, and has a heart. It helps to give us our identity, and aids recruitment of talent. It also means we have a great place to relax after work,” said Clemens Wangerin, managing director of Liverpool-based VR social network vTime.
Manchester boasts 62,653 digital tech economy jobs, with these workers commanding an average salary of £47,349. Digital GVA in the area is high, at £2.8bn, and 17% of the tech businesses located there are classed as ‘high growth’, according to the Tech Nation report.
An average of 898 startups were born in the area per year from 2011-2015, with the total number of these companies increasing 23% in the same time period.
As mentioned earlier, digital business turnover increased 45% from 2011-2015, which is perhaps why 85% of those surveyed in the area said they were optimistic about digital growth.
Talent supply is an issue in Manchester – you may be sensing a theme here – with just 27% of survey respondents claiming the availability of skilled workers is ‘good’.
Some 38% of those surveyed in Middlesbrough said they rated access to talent as ‘good’, but many don’t feel their lives are terribly peachy, with just 58% saying they have a good quality of life.
There are 6,970 digital technology jobs in the area, with an average salary of £34,956.
The average number of tech startups created per year between 2011 and 2015 was just 65, but The Launchpad on Teesside University’s campus is aiming to increase this by offering up to £10,000 to graduate entrepreneurs via its Launchpad FUEL startup programme.
Newcastle-based tech workers seem very content, with a whopping 90% stating their quality of life is ‘good’. Their talent supply isn’t quite so positive, though, with only 22% of survey respondents labelling this as ‘good’.
There are 20,290 digital tech jobs in the area, paying an average of £51,213 per annum. The work these people do translates to a GVA of £1bn.
Some 21.7% of digital tech businesses in Newcastle are classed as ‘high growth’, with digital business turnover increasing 40% between 2011 and 2015.
Alan Laing, managing director, Northern Europe, at Sage, suggested there is a strong sense of community among the businesses in Newcastle and a willingness to collaborate.
“This is a thriving community, which creates a highly valuable digital tech talent pool and strongly contributes to the nation’s digital tech sector,” he added.
There are 18,961 digital tech economy jobs in Sheffield, with an average salary in this field of £46,278. Digital GVA in the city averaged at £339m from 2013-2015 and 11.3% of tech firms there are classed as ‘high growth’.
Quality of life was described as ‘good’ by 82% of respondents but, you guessed it, talent supply is poor, with just 27% calling it ‘good’.
The average number of tech companies being created per year in Sheffield from 2011-2015 was 173, with digital business turnover increasing 38% in the same time frame.
The city won £3.5m from central government and is using it to create a digital incubator, so we could see the number of startups in the city rise rapidly over the coming years.
Sunderland tech workers, of which there are 5,742, earn an average salary of £38,895, almost £8,000 more than the average earned by those in the area who don’t work in tech.
Digital GVA from 2013-2015 averaged £148m and this was based on the birth of just 46 startups per year (on average). Digital business turnover is rocketing, though, with a 101% increase in growth from 2011-2015.
Talent supply isn’t great, according to those who work in the local tech sector, with just 22% labelling it ‘good’. Some 63% described their quality of life as ‘good’, but significantly more (81%) said they had a good level of optimism in local digital growth.
Not everyone believes there is a talent shortage in Sunderland. Dominic Edmunds, CEO and founder of SaleCycle, said: “This region has a very strong talent pool that the company has tapped into in order to grow rapidly in recent years. From this Sunderland base, SaleCycle has been able to build a great client list and expand across the globe, with offices now in Washington, DC, Paris and Singapore.
Tech City News is accompanying Tech City UK on its Tech Nation tour (before you ask, we’re not connected, we just have similar names!) Stay tuned for more coverage and regional analysis.