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September 2023

Where next for
Liverpool tech?

Liverpool’s tech ecosystem is at a low to medium level of maturity. Despite a record year of equity fundraising for the city region’s startups, deal flow remains comparatively low to northern neighbours Manchester and Leeds. There are signs this is changing. An influx of new initiatives – including accelerators and seed funds – from both the private and public sectors is helping to drive momentum.

But Liverpool is not coming from a standing start. Liverpool’s economy – historically skewing towards professional services, property, hospitality and the arts – has been embracing digital and creative. Output from the digital and creative sectors in the Liverpool City Region has grown by 77% over the past decade, compared with 44% in England as a whole, according to Invest Liverpool. In summary, Liverpool’s tech sector is “still nascent”, says Startup Grind’s Jonny Clarke, “but with large untapped opportunity”.

Unlocking investment

Unlocking investment
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Regional development director, North West, Lloyds Bank

Liz Delahaye,
Regional development director, North West, Lloyds Bank

“The tech sector within Liverpool City region is going from strength to strength and its contribution to the wider UK economy is growing year on year. Creative innovation and thriving entrepreneurial spirit are driving the sector forward along with the City Region’s place-based innovation approach. This, coupled with investment from both the public and private sector, bespoke support and ultra-fast digital connectivity, will enable tech startups to innovate, collaborate and push boundaries at a pace that will be pivotal for the next stage of growth.”

 

Taran Singh
Driving a talent culture shift

Driving a talent culture shift
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Liverpool’s tech company managers cited talent as one of the region’s strengths. While it has access to a large pool of workers, retention can be a challenge – particularly due to a lack of large corporate employers for graduates. Liverpool has a higher proportion of “ambitious” digital companies – those that are yet to hit scaleup status – compared to the UK average, according to data compiled by Growth Platform. This suggests that the Liverpool City Region has a wave of startups on the cusp of becoming high-growth companies – provided conditions are right.

Helping startups scale from those early stages into household names will create more incentives for skilled workers to stay. "For future growth, the region should aim to support SMEs and nurture scaling companies through initiatives like Tech Climbers and Baltic Ventures,” says Matt Robinson, head of nations and regions at techUK. “Enhancing digital skills is crucial for backing businesses, driving innovation, and attracting inward investment."

Passion, culture and creativity are three recurring themes that emerged from conversations with Liverpool stakeholders. But the city’s entrepreneurs could also benefit from borrowing from the “Silicon Valley hustle” mentality, says Clarke, and having more confidence in its tech-company credentials. Changing this will be a gradual and holistic process.

Science spinout power

Science spinout power
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The University of Liverpool is developing a strong track record for producing spinouts in areas including, life sciences, engineering and advanced materials. It has founded 18 companies in the last five years based on technology developed through academia. ReNewVax, for example, is developing next-generation vaccines to tackle bacterial infectious diseases. Robotiz3D is developing autonomous monitoring and repair vehicles for surveying and maintaining road systems.

The university works with Baltic Ventures and LYVA Labs to connect these companies with local investment networks. A Treasury-issued review of spinouts – which the government has identified as an important part of its strategy to become a “science and technology superpower” – is due this summer and will "identify best practice in the field to promote innovation and grow businesses of the future.

Professor Anthony Hollander

Pro-vice-chancellor for research & impact and professor of stem cell biology,University of Liverpool

 

“Our ambition as a university is to found investible spinouts and ideally retain the majority of them within the region, to create a cluster of high-tech, high-growth companies. The benefits of an active University spin-out ecosystem are evident – inward investment, highly skilled jobs and opportunities for our graduates.

“As a university with deep and world-leading expertise spanning across a range of sectors, we are also interested in spin-ins: offering companies with the potential for high growth to partner with a university to access world-class expertise and facilities along with access to funding. This provides exciting opportunities to accelerate their growth potential within the city region.”
Taran Singh

Creating a unified message


The “liveability” of Liverpool is often cited as a key strength, but this could be more clearly articulated through the lens of tech entrepreneurship. Stakeholder feedback found that Liverpool isn’t traditionally considered a tech hub by external investors and companies. “Liverpool is one of the best cities in the UK to live in. It has a lot of energy and personality, friendly people, and provides a high quality of life,” says Garcia. “The city boasts amazing talent coming out of its universities, and many entrepreneurs who have ventured into building generational changing companies.” Identifying and nurturing stand-out sub-sectors and communicating this can help build a clearer picture of Liverpool’s tech ecosystem. The city’s strength in the creative sector lends itself naturally to immersive technology such as VR and the metaverse, along with gaming. Meanwhile, its life science-focused universities support thriving medtech, healthtech and biotech startups. Some describe the city region’s tech ecosystem as “fragmented” and point to a lack of organisational structure. The combined authority has been ramping up support of the tech sector, and is well-placed to provide the impetus and framework for private sector entrepreneurship to thrive. Greater autonomy, such as the recent devolution deal struck by Greater Manchester, could ensure local government is better equipped. In fact, 57% of surveyed tech managers said that greater devolution in Liverpool could help unlock tech sector growth in the region. Liverpool’s tech sector remains some way off international recognition. Just 43% of tech managers say it is globally recognised. Events like Slush’D are a step in the right direction to capitalising on Liverpool’s momentum. All evidence points to Liverpool’s tech sector being at an inflection point. To borrow from Liverpool’s most famous musicians, the tech sector must ‘come together’ and create a unified strategy. Nurtured in the right way, this can accelerate existing momentum for the promising northern powerhouse city region.

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Lloyds
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Regional tech report: West Midlands