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January 2024
As the North East approaches devolution which takes effect in May 2024, tech players in the region say they expect to see the business community soon benefitting from a unified industrial strategy and support network.
“We need to work far more collectively and devolution could move the needle on this,” said Marek Tokarski, senior enterprise manager at Durham University.
“The funding into the North East as a result of devolution gives people the purpose and intention to work together and contribute to initiatives beyond their own community. Opportunities will be more visible across the region and more coordinated. It removes the pressure to try to replicate initiatives in every location.”
According to the UK government and the North East’s local authorities, the devolution deal is set to create 24,000 new jobs and leverage £5bn of private investment, among other outcomes to ‘level up’ the region.
Jamie Hardesty of Sunderland Software City believes devolution will also contribute to a more coherent infrastructure and tech support strategy.
“There has been some disparity in the North East in terms of where tech activity is happening and disconnected offerings between different authorities have been flagged” he explained. “A single mayoral combined authority will be a strength for the region as it pulls everyone in the same direction.
“In terms of tech sector growth, a unified approach will allow us to take stock of the real assets we have here across the entire region – including some of the best universities in the country, physical innovation hubs and access to expertise – and make strategic decisions which take the entire ecosystem into account. This ensures that people can access the same support, networks and opportunities from anywhere in the region.”
Jennifer Hartley,
director,
Invest Newcastle
The North East is becoming an ever-stronger voice in the Northern Powerhouse agenda, and this is only set to increase post-devolution, where we will have a once-in-a-generation opportunity to transform the regional economic landscape.
Caroline Churchill,
partner,
Womble Bond Dickinson
The North East’s tech and data ecosystem is in an excellent position for rapid expansion and investment in the next five years. Emerging technologies such as AI are transforming businesses, driving startups, and becoming a new beacon of growth. The region’s digital sector has flourished in recent years, with many emerging firms seeing promise in the industry.
As the region’s reputation as a tech and data hub grows, we hope to see a corresponding increase in investment. Recently, Northumbria University was awarded £9m for an AI research and innovation programme, and the presence of organisations such as The National Innovation Centre for Data in the region will only help to continue this pattern.
In addition to the North East’s strengths in fintech, cybersecurity, advanced manufacturing and immersive technology and gaming, recent developments in the region’s biotech and climate tech subsectors indicate that these could become important areas of growth.
Last year there was a flurry of biotech activity, including a new lab-grown meat venture created in partnership between listed Newcastle biotech company BSF Enterprise and University of Newcastle spinout CellRev, which itself raised £1.4m in 2023.
Other significant biotech funding rounds included environmentally friendly cosmetics startup Hexis Lab and Aelius Biotech, which provides testing services to pharmaceutical companies.
Stakeholders also see significant business opportunities in the North East from the ‘green economy’, including Teesside freeport, which has been planned as Europe’s ‘green super port’. The project is not without controversy – facing charges of corruption and damage to the local marine ecosystem – but it’s one of many examples of North East investment which is intended to support the global net zero transition while delivering local growth opportunities.
Liz Gilligan, the founder and CEO of Material Evolution, a Middlesbrough-based low-carbon advanced materials company, said: “One of the distinctive features of the region is decarbonising at an industrial scale and using financial instruments to allow green to become the new economy.
“There is a trend of redeveloping industrial hubs to create the low carbon future. I think it’s exciting to see how the green economy can not just save the planet but redevelop areas.”
In November 2023, a new investment zone for the North East was announced, focusing both on advanced manufacturing and green industries. The zone is set to make the most of opportunities for clean energy around the Tyne and offshore, and reflects the region’s emergence as a significant national cluster for green innovation.
Sam Baldwin,
technology sector director,
Lloyds Bank Business & Commercial Banking
Over the coming years we can expect to see growing numbers of tech businesses and increased collective revenues across the region, driven by the levels of digital sector growth and new startups we are seeing today. Infrastructure development will be a key factor in the near future, and the region is well positioned to deliver on this, with both Newcastle and Sunderland recently recognised as leading UK smart cities.
The investment landscape is more challenging to forecast, however growing community activity and events through organisations such as TechNExt and FinTech North are creating exciting opportunities to ensure the region gets the focus and investment it needs.
Growth in the North East’s digital and innovation sectors will also involve digital transformation and greater uptake of technology across the region’s small and medium businesses (SMBs) which aren’t currently focused on tech.
Sage’s Paul Struthers says: “As the backbone of the economy, SMBs need to be empowered to seize the transformative opportunities that technology brings. By supporting SMBs to digitalise and decarbonise, the UK can become more productive and sustainable.
“As the government strives to make the UK a tech superpower, there is a real opportunity for the North East to use its rich industrial, engineering and technology heritage to lead the way. By fully digitalising the operating environment of SMBs, it would deliver an extra £232bn to the British economy.” Ultimately, stakeholders agree that the North East’s growth trajectory significantly depends on how the investment landscape develops.
Ashley Wright, vice president of commercial at ecommerce platform and agency Visualsoft, said: “If we want to have any chance of competing then we need to see more inward investment. It really all comes down to the appetite from the public and private sectors to invest inwardly into the North East.
“If we see more ambitious acquisitions by investors and we see positive moves by government to stimulate the tech economy of the North East then the area is well positioned to deliver the next THG or Just Eat, but if investment continues to be cautious or primarily focused on the South then I expect we will maintain our status quo with a few large players, such as Visualsoft, and many plucky startups vying, but struggling, to overcome their growing pains and hire the talent they need to evolve their product to the next level and achieve the scale that their innovations deserve.”
Womble Bond Dickinson (WBD) is a full-service international law firm sitting amongst the top 25 UK law firms and ranking 109th globally. In the UK, WBD has more than 120 partners and around 450 lawyers based in eight strategic locations, including the UK’s biggest cities and legal hotspots.
In the US, WBD boasts 24 offices. The firm’s reach also extends to Europe where it has strategic partnerships with law firms in Germany and France, and through the Lex Mundi network, WBD can offer clients access to counsel in more than 120 countries.
Advising businesses across 12 key sectors of expertise, the firm’s clients include over 40 FTSE 350 companies, including many of the largest businesses in the country, private clients, charities as well as UK local and central government authorities.
WBD has a strong focus on innovation and has consistently ranked in the top 30 most innovative law firms in Europe by the Financial Times. The firm’s dedicated and joined-up team of IT solicitors and data protection solicitors are perfectly situated to help companies adapt and thrive in a digital landscape.
Part of the NewcastleGateshead Initiative, Invest Newcastle is an award-winning investment promotion agency working to drive economic growth, secure capital investment, attract new businesses, and create jobs for residents.
Invest Newcastle helps businesses to locate, expand and thrive through a bespoke range of services and champions the North East region and its strengths on a national and international stage, promoting Newcastle as a city to collaborate, innovate and thrive.
Over the last 10 years, it has supported almost 300 new businesses to relocate or expand, helping to create and safeguard 14,500 jobs.
Invest Newcastle provides support in a number of key strategic sectors, including digital technology, life sciences and energy. It is funded by Newcastle City Council, Gateshead Council and North of Tyne Combined Authority.
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