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November 2023

Expert perspectives

Strengths, challenges & opportunities

The tech community across Bristol and Bath benefits from what many say is a uniquely regional culture and attitude that prioritises collaboration and authenticity over competition or self-promotion.

In practice, this has created an active tech sector with many different support offerings and networks for tech workers and companies, and cross-organisational initiatives like the new START accelerator programme funded by the West of England Combined Authority and run by techSpark and a consortium of four universities: The University of the West of England, Bristol (UWE Bristol), The University of Bristol, The University of Bath, and Bath Spa University.

Kimberley Brook, director of incubator SETSquared Bristol, says that the growth of the region’s tech sector has resulted in many more tech-related organisations setting up in the cities in recent years, but that the collaborative culture allows each to fulfil a different need while also working together where appropriate.

She adds: “We have a really good relationship with the other incubators; we all understand what each others’ offering is and therefore we are in the best place to direct people to the most useful support mechanism for them.”

The diversity in support available is in part driven by the fact that Bristol and Bath have a variety of subsector strengths, rather than a singular industry focus. Telecoms, semiconductors, advanced materials, computing innovation and cybersecurity are long-established strengths, while green tech, health tech and createch are burgeoning areas.

Strengths, challenges & opportunties
Strengths, challenges & opportunties

The intersection of so much expertise “is a powerful mix” for fostering innovation, says Nick Sturge, techSpark chair, referencing projects like the robotic penguin used in BBC nature documentaries with Bristol-based contributors across software, robotics, behaviour science, and media.

The numerous active subsectors also attract corporates to the region, adds Brook, since they can access and engage in opportunities across multiple verticals, making it worth setting up a regional base.

Nonetheless, these features of Bristol and Bath’s tech ecosystem can present barriers to growth too. Karin Rudolph, founder of AI ethics consultancy Collective Intelligence who also runs the Tech Ethics Bristol network, notes that the range of support and networks available can be difficult to navigate for anyone new to the region or the tech community.

The focus on collaboration and authenticity can undermine the region’s growth ambitions since it often means rejecting the idea that only a few tech companies can be ‘winners’, which contrasts with the focus placed on the growth journey from scaleup to unicorn – achieved by only around 2% of seed-stage startups globally.

Sturge believes that the culture of authenticity has led to less risk-taking and a reluctance to proactively promote and advocate for the success of the region’s tech sector and specific businesses. It has created an unusual situation in which the region has a lower rate of startup creation than other places, but a higher rate of startup survival. According to the West of England Combined Authority, 42% of startups founded in the last five years have survived, a rate second only to Northern Ireland.

"There's a conscience in the city and there's a positive attitude of getting on with it and doing the right thing,” he explains. “We have a healthy cynicism in the city which can challenge people but if you get over that, then you thrive. People tend to only set up businesses if they're decent businesses, and people want to do it right.”

Infrastructure and support

Our survey of 100 senior tech leaders based in Bristol and Bath showed that in general, Bristol and Bath are seen as having sufficient resources and infrastructure for its tech sector.

In particular, the cities were rated well for digital infrastructure, diversity and inclusion and available talent, with these having the lowest proportions saying these needed improvements.

On the other hand, for both funding and affordable office space, more people said they needed improvement than said these were excellent.

While the Bristol region received the most Innovate UK grant funding in 2022 compared to other regions, stakeholders say early-stage equity investment is more limited, particularly highlighting a shortage of angel and pre-seed funding in the region to support startups and university spinouts before they are ready to approach larger venture capital investors.

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How do tech leaders rate features of Bristol and/or Bath?

Digital infrastructure / connectivity

Innovation hubs / support programmes

Public transport

Affordable office space

Events / networking

Diversity & inclusion

Available talent

Funding

Excellent Sufficient Needs improving

“The most common barrier to tech growth we hear about in the region is access to funding, with many growing businesses needing to seek investment from further afield, often involving London-based investors and the additional travel time and expense associated with that.

“This is possibly linked to the region’s culture, since we’re not as good at shouting about our achievements as we should be, which allows attention to be drawn elsewhere. If we can amplify the latter in a joined-up way, it can only help increase the focus on the region as far as access to investment and grant funding is concerned.”

Alastair Mitton
Partner at Womble Bond Dickinson

“The most common barrier to tech growth we hear about in the region is access to funding, with many growing businesses needing to seek investment from further afield, often involving London-based investors and the additional travel time and expense associated with that.

“This is possibly linked to the region’s culture, since we’re not as good at shouting about our achievements as we should be, which allows attention to be drawn elsewhere. If we can amplify the latter in a joined-up way, it can only help increase the focus on the region as far as access to investment and grant funding is concerned.”

Alastair Mitton
Partner at Womble Bond Dickinson

Business challenges

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What challenges have tech leaders experienced?
51%
32%
30%
27%
26%
22%
21%
16%
15%
Cost of living
Office space
Expanding beyond Bristol/ Bath
Securing funding
Traveling around Bristol/ Bath
Hiring
Diversity & Inclusion
Networking/ meeting peers
Digital connectivity
Tech figures interviewed for this report explained that while Bristol and Bath are generally seen as desirable places to live – helping to attract new talent from outside the cities – the cost-of-living crisis has hit particularly hard. According to Numbeo’s most recent Cost of Living ranking, Bristol is the ninth-most expensive out of 26 cities. Since 2021, its inflation rate has been higher than London, while its year-on-year wage growth rate has mostly dropped below the capital, research by Centre for Cities shows. Another crisis is unfolding in Bristol and Bath: the unavailability of lab space for research- intensive startups and tech companies. With all current lab space at capacity, the next availability is likely to be at least two years away with the opening of Mission Street, and then the University of Bristol’s CM1 building on its new Enterprise Campus due to open around 2027.
“Given the specialist nature of the technology firms in the region, having access to highly skilled employees is vital to reaching full potential. This remains an ongoing challenge despite huge success in attracting the right talent into the area.

“There are also challenges presented by the rising launch costs, driven by expensive office and lab space. Technology incubators such as Science Creates’ Unit DX and DY, and the University of the West of England FutureSpace are now playing a role in addressing this particular challenge by providing specialist space and programmes for technology businesses at a sustainable cost.

“Finally, with a lower level of equity funding into the region than in areas such as London, the work of regional organisations and incubators to spotlight investment opportunities is vital. Access to banking services is also crucial for start and scale up businesses in Bristol & Bath. Having a relationship-based banking provider with specialists who live and work in the ecosystem is vital to ensure founders can focus on building businesses.”
Lloyds Matt Brook

Matt Brook
Relationship Director, SME Business and Commercial Banking at Lloyds Bank Bristol and Bath

“Given the specialist nature of the technology firms in the region, having access to highly skilled employees is vital to reaching full potential. This remains an ongoing challenge despite huge success in attracting the right talent into the area.

“There are also challenges presented by the rising launch costs, driven by expensive office and lab space. Technology incubators such as Science Creates’ Unit DX and DY, and the University of the West of England FutureSpace are now playing a role in addressing this particular challenge by providing specialist space and programmes for technology businesses at a sustainable cost.

“Finally, with a lower level of equity funding into the region than in areas such as London, the work of regional organisations and incubators to spotlight investment opportunities is vital. Access to banking services is also an issue for businesses in Bristol & Bath, having a relationship-based banking partner with teams who live and work in the community is vital to ensure a founder’s focus can remain on their business.”

Lloyds Matt Brook

Matt Brook
Relationship Director, SME Business and Commercial Banking at Lloyds Bank Bristol and Bath

Opportunities for growth

Despite significant development in the region’s tech sector over the last decade, it’s clear that there remain more opportunities for growth that could be harnessed with a range of interventions and initiatives.

Stakeholders referenced ‘growing pains’ in the region due to shifting attitudes and values that come with a maturing ecosystem, and called for even more thoughtful consolidation, strategy and political leadership to drive growth in the right direction.

Among the suggestions for what a growth strategy should focus on were calls for better connections with other tech clusters in the UK, initiatives to de-risk setting up new companies, more regional financing opportunities beyond equity investment and better international recognition for Bristol and Bath’s tech hubs in order to attract the best talent.
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What would drive growth in Bristol and Bath's tech sector?
39%
32%
30%
29%
26%
24%
23%
23%
19%
Greater investment into digital infrastructure, such as 5G and superfast broadband
More specialist work hubs for technology businesses
Greater public-private partnerships investing in technology SMEs
Local initiatives to promote careers in tech
More growth programs and entrepreneurs support networks
Local digital skills training
Greater investment into transport infrastructure
More events and networks to faster collaboration
Better connections between technology businesses and local universities

Regional subsector strengths

The survey of tech leaders demonstrates the range of subsector strengths in Bristol and Bath, with cybersecurity and fintech coming out top.

Climate tech and deeptech are seen as holding the most opportunity for growth, ranking highly as current strengths in the region but receiving an even higher proportion of votes for future subsector strengths. Similarly, quantum computing and VR/AR also stand out as areas in which people expect future development.

Regional subsector strengths

The survey of tech leaders demonstrates the range of subsector strengths in Bristol and Bath, with cybersecurity and fintech coming out top.

Climate tech and deeptech are seen as holding the most opportunity for growth, ranking highly as current strengths in the region but receiving an even higher proportion of votes for future subsector strengths. Similarly, quantum computing and VR/AR also stand out as areas in which people expect future development.

Bristol & Bath’s subsector strengths

Tech decision maker view

To represent how the Bristol and Bath tech community currently views the sector, where it is heading and what needs to change, UKTN commissioned Censuswide to survey 100 senior managers at technology companies based in the two cities.

In addition to the insights on strengths, challenges and opportunities above, they provided their views on the tech sector more generally, based on their experiences.
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I would recommend Bristol / Bath to someone considering where to locate a new tech business

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I feel that being based in Bristol / Bath puts my tech business at a disadvantage

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I have experienced specific advantages as a result of basing my business in Bristol / Bath

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It has become more attractive to start a tech business in Bristol / Bath over the last five years

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Bristol's and/or Bath's technology sector will grow rapidly in the next five years

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Bristol's and/or Bath's tech ecosystems get the international recognition they deserve

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The local government does enough to support tech businesses in Bristol / Bath

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There is sufficient support from central UK government for Bristol's/ Bath's tech businesses

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