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September 2023
Liverpool is renowned for its rich cultural history. From actors and comedians to musicians and writers, the city has been home to some of the UK’s most famous faces, not to mention its most successful exports. Indeed, exports were integral to Liverpool’s industrial past, too. Its position on the Mersey Estuary made it a centre for shipping, trade and industry – it is estimated that in the 18th and 19th centuries a staggering 40% of the world’s trade passed through Liverpool’s Docks. However, during the 1980s and 1990s, Liverpool was hit by a period of decline and population drop, stemming from the loss of industrial and maritime jobs in the region.
Now, Liverpool is on the path to reinventing itself as the North West’s next high-growth tech hub. While its tech ecosystem is nascent compared to the UK’s other top tech hubs, there are positive signs. In 2022, there were a record 85 equity investment deals for Liverpool-based startups with a collective value of £93m, according to data provider Beauhurst. This bucked a broader downturn for startup funding across the UK as a whole amid a challenging macroeconomic climate. Across the Liverpool City Region there are 89,300 active registered firms and it is home to global brands such as PlayStation and The Very Group.
Entrepreneurs point to Liverpool’s unique personality, high energy and quality of life. But they also say a startup mindset is yet to fully permeate across the city. But what are the factors underpinning its success, and what are the barriers to growth?
“Liverpool City Region’s real sense of community and collaboration around technology sets it apart from others across the UK, with the Knowledge Quarter and other tech hubs featured in this report being great examples of this. The city region also benefits from strong academic leadership driving a culture of creativity and innovation, as well as a healthy mix of commercial organisations, support networks and science hubs.”
Q2. What, if anything, do you consider to be the biggest strength(s) of Liverpool as a place to start and grow a technology business in? (Tick up to 3)
“Liverpool City Region is at the vanguard of technology driven industrial solutions, combining unique expertise, cutting-edge facilities and equipment and offers the scale required to help transform UK productivity. We are at the global forefront of translational R&D with distinctive world-leading capabilities in infection, materials chemistry, high performance computing and AI solutions.
“We are home to a pioneering, collaborative, highly cost-competitive and business-friendly environment. In tandem, The University of Liverpool is tackling global challenges at scale and pace by working with industrial, clinical and academic partners, nationally and internationally to accelerate research and deliver real world impact in digital and tech.”
Q3. What, if anything, do you consider to be the biggest weakness(es) of Liverpool as a place to start and grow a technology business in? (Tick up to 3)
Tech managers cited support networks and support from local government among the biggest areas holding back growth. Similarly, they also said increasing public-private sector partnerships for co-investment would have the greatest impact in driving growth for Liverpool’s tech sector.
While Liverpool lacks the same levels of support as more mature tech hubs, there are initiatives in the pipeline that hold high promise. Last year, Liverpool City Region Mayor Steve Rotheram unveiled £4.1m in funding for a tech accelerator. This led to the creation of Baltic Ventures, which this month unveiled its first startup cohort. Separately, LYVA Labs plans to launch a deeptech incubator this autumn, providing a 12-month support programme for early-stage startups. It has also been selected by InnovateUK to run the microbials accelerator with the University of Liverpool, among others. These initiatives are very much in their infancy, which may explain the lack of awareness among local tech managers.
Collaboration between businesses and networks within Liverpool was also a top-cited improvement. Startup events like Slush’D, which is being held in the UK for the first time, will improve collaboration and support a flywheel effect across the city region. As one founder of an early-stage Liverpool startup puts it: “Liverpool’s tech sector is growing each day, the council and management bodies are investing in the development of the city region area but there’s a lot to be done to create the startup feeling in the area.”
“Whilst Liverpool’s stature and reputation as a key UK tech hub continues to grow rapidly, the City Region does face into challenges to realise its potential, particularly when compared to more established technology ecosystems. Investment in infrastructure and establishing support networks are key to sustainable, long term success in the region – and despite the limitations called out in the research some positive steps are now being taken.
“Ensuring sufficient and inclusive access to these new support networks will be key to their success, raising awareness through a range of channels to realise their full value to the community.”
Q4. Which of these measures, if any, do you think would have biggest impact in driving growth for Liverpool's tech ecosystem? (Tick up to 3)
Liverpool’s higher education institutions are key to Liverpool’s emerging strength as a tech hub. The University of Liverpool is globally renowned, and it is one of the top three centres in the UK for computer science-related published research. Liverpool Hope University and Liverpool John Moores University are both also located in the LCR. There are more than 70,000 students based across its four universities, and 5,000 of them each year specialise in digital and creative courses.
The second-most cited measure to drive growth for Liverpool’s tech ecosystem is increasing careers guidance to educate young people on pursuing a potential career in tech. Higher education institutions have a key role to play here. This could be through encouraging students to launch their own startups and commercialising research through academic spinouts. Equipping young people in Liverpool with not just the information they need to pursue a career in tech, but also instilling the belief that it is a viable option, can maximise what stakeholders consider one of its best assets – its people. The Studio School for 14–19-year-olds, describes itself as feeling “more like a workplace than a school” and is a good example of this mentality.
“Our world-leading academics are driving healthtech and AI through research in developing AI-powered body scans to improve type 2 diabetes diagnosis, AI solutions to reduce vision loss for people with diabetes, AI systems capable of analysing digital pathology images leading to improved diagnoses for diseases, like cancer at earlier stages and creating a hotbed for healthtech through the LCR Life Science Investment Zone.
“Scientists from our Materials Innovation Factory and Chemistry Department are developing the next-generation of sustainable materials for consumer products to transform the global chemical supply chain and help the UK achieves its net zero target – and AI tools to accelerate the discovery of new materials and automated materials discovery using our own bespoke robotic platform to speed up formulation process.”
