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November 2023

Looking ahead

What’s next for Bristol and Bath’s tech scene?

Bristol and Bath’s tech sectors have come through a period of transition in recent years. Not only have the ecosystems grown significantly, but the support structures and resources have also experienced flux.

A number of established local initiatives have ended – including incubator and investor WebStart, VC firm Eden Ventures, tech showcase Venturefest, Tech Nation’s local network, accelerator programmes by Shaw & Co and PwC and scaleup incubators by large tech companies including Oracle, Toshiba and Nvidia.

But there have been just as many, if not more, new initiatives and investments in the region’s tech sector. New investors on the scene include UK-wide Mercia, which set up a Bristol base in 2022, and QantX which transitioned from a collection of angel investors to a VC fund in 2021.

Major tech companies also have expanded their presence or investment in the region, with BT opening a new “flagship” office for 2,500 people in 2023, and Dyson building a £100m tech centre in Bristol.

The AHRC-funded five-year, £6.8m programme Bristol & Bath Creative R&D is in its final year of supporting creative tech collaborations, run by four regional universities and digital centre Watershed. Another five-year initiative funded by Innovate UK began last year with Digital Catapult and Nvidia running a creative tech challenge MyWorld for West of England startups.

“Bristol and Bath are home to a growing number of high-profile technology businesses that are disrupting and adding value to their respective sub-sectors globally. With the huge amount of time, effort and investment over the last 10 years, it is likely that we will see an increased number of scaling technology businesses in the next five years.

“An interesting dynamic is the re-investment by serial entrepreneurs and founders into the ecosystem, whereby the ‘next generation’ of technology scaleups can benefit from the learning of those individuals. This allows them to iterate faster, avoid potential missteps and address their target markets more effectively to grow more rapidly.”

Lloyds Matt Brook

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

“Bristol and Bath are home to a growing number of high-profile technology businesses that are disrupting and adding value to their respective sub-sectors globally. With the huge amount of time, effort and investment over the last 10 years, it is likely that we will see an increased number of scaling technology businesses in the next five years. “An interesting dynamic is the re-investment by serial entrepreneurs and founders into the ecosystem, whereby the ‘next generation’ of technology scaleups can benefit from the learning of those individuals. This allows them to iterate faster, avoid potential missteps and address their target markets more effectively to grow more rapidly.”
Matt Brook Relationship Director, SME Business and Commercial Banking at Lloyds Bank Bristol and Bath

Supercomputing strengths

One of the most significant developments will see Bristol build and host the UK’s most powerful supercomputer, with the associated AI Research Resource at the University of Bristol set to be a national facility for AI innovation.

Karin Rudolph, founder of AI ethics consultancy Collective Intelligence, says: "With the new supercomputer coming to Bristol I think there's going to be a lot more investment and interest in the region’s deep tech capabilities. Companies developing AI will be able to do more testing and have more access to resources.

“What is now very much needed in the region is a better understanding of the effect of the upcoming AI regulations, what resources are available to support businesses navigate this new landscape and how we can develop a culture of safe and responsible innovation."

Tech for good

Tech leaders in the region say that all these shifts and developments in recent years have caused a mild identity crisis in the tech ecosystem; the growth has cultivated newfound confidence and a sense that Bristol and Bath are competing with tech hubs globally. But this momentum has not yet been channelled into a clear strategy that identifies and protects the region’s essential values while supporting a thriving, sustainable tech sector for the future.

TechSpark Chair Nick Sturge says that a “big opportunity” in Bristol and Bath will come from focusing on innovation-for-impact. He notes that with a higher proportion of B Corps in the cities than elsewhere in the UK, the region is well-positioned to lead in this area. He’s hopeful that the region can drive a shift in mentality in which it becomes “mainstream” for entrepreneurs and investors to tackle social problems without this being sidelined as a special impact project.

Investment resource

Tech West England Advocates, alongside other tech leaders in the region, are dedicated to scaling up the region’s startups and ensuring they can expand internationally. Upcoming initiatives include a trade mission to Hong Kong, scaleup programmes and levelling up tech funding into the region.

Invest Bristol and Bath is a key driver of inward investment, but stakeholders say more resource and strategic support is needed to ensure that Bristol and Bath do not fall behind, given that the region has not received funding through the UK government’s Innovation Accelerators and Investment Zones schemes.

While lab space is at capacity and affordable office space hard to come by, particularly in Bristol, the supply and quality of office space in Bath has increased in recent years, opening the possibility that Bristol-based companies will choose to move to Bath as they expand.

“Given the nature of much of the tech ecosystem, especially for those operating in software development, understanding how to adopt and deploy artificial intelligence in a way that complements the human skills based here will be key.

“However, given the people-focused and socially aware culture of the area, there is no better place to meet this challenge in a positive way. Rapid developments in AI and more economical access to technology has the potential to supercharge much of what the region is great at. This will be a key driver supported by the ongoing evolution of the training available through the region’s universities. We can also expect to see developments in climate change-focused technologies, with Bristol’s long history in this critical area enhanced by its selection as the UK’s only pilot city in the NetZeroCities Pilot Cities Programme.

“The continued innovation-focused development of the two cities themselves, like the Temple Quarter Enterprise Campus in Bristol, will also enhance the potential for collaboration and will provide an additional focal point for the region to help it to compete on the broader stage.”

Alastair Mitton
Partner at Womble Bond Dickinson

“Given the nature of much of the tech ecosystem, with a strong software development strand, how businesses in the region adopt and deploy artificial intelligence in a way that complements the human skills based here will be key. “However, given the people-focused and socially aware culture of the area, there is no better place to meet this challenge in a positive way. Rapid developments in AI and more economical access to technology has the potential to supercharge much of what the region is great at. This will be a key driver supported by the ongoing evolution of the training available through the region’s universities. We can also expect to see developments in climate change-focused technologies, with Bristol’s long history in this critical area enhanced by its selection as the UK’s only pilot city in the NetZeroCities Pilot Cities Programme. “The continued innovation-focused development of the two cities themselves, like the Temple Quarter Enterprise Campus in Bristol, will also enhance the potential for collaboration and will provide an additional focal point for the region to help it to compete on the broader stage.”

Alastair Mitton
Partner at Womble Bond Dickinson

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Lloyds
Womble Bond Dickinson
Regional tech report: Bristol and Baths