May 2023
The West Midlands'
key tech hubs
Birmingham was once the epicentre of the Industrial Revolution. Today, it is the beating heart of the West Midlands tech ecosystem. In 2022, it jumped from fourth to second in the CBRE’s UK Tech Cities list of the country’s leading tech hubs outside London.
The UK’s second-largest city is home to almost two-fifths of West Midlands tech workers. According to job search engine Adzuna, it employs 56,000 people. Feeding this talent pipeline are Birmingham’s nine universities and higher education institutions, which produce a combined 58,000 graduates each year. Its five universities are: Birmingham City University, Newman University, University of Birmingham, University College Birmingham and Aston University. In fact, Birmingham is the youngest major city in Europe, with under-25s accounting for nearly 40% of its population, ensuring a large and diverse talent pool of young prospective employees for the region’s tech businesses.
Birmingham also boasts a number of digital and tech clusters, including The Custard Factory and the Innovation Birmingham Campus, which Bruntwood SciTech calls home. The city is also home to X+Y at the Foundry, a co-working space that is home to the Founder’s Academy and Lab UK, among others. "Birmingham has solid infrastructure for startups and scaleups, supported by the university and Birmingham Science Lab,” says Stephen Page, CEO of SFC Capital, an investment fund manager that has invested in nearly 30 companies based in the West Midlands.
It has a rich history in automotive and manufacturing, with notable tech sub-sectors including AI and automation, as well as tech firms that are adjoined to the city’s large professional and financial services sectors, with fintech another key driver of growth.
Coventry is another city in the West Midlands that has built on its strong roots in manufacturing and automotive to fuel the growth of associated technology sectors today. Standard Triumph, Morris, Jaguar, Daimler and Rootes Group have all been based in and around the city. Coventry is now established as a leading centre for the manufacturer of electric vehicles and their components.
It has become the West Midlands’ leading centre of advanced manufacturing for the automotive, rail, aerospace and motorsport industries, employing some 40,000 people in these pursuits. Leading lights in the Coventry tech sector include the Coventry University Technology Park, a 20-acre site comprising 14 unique dedicated business facilities that are designed to support the development of innovation-led, high-growth, knowledge-based businesses; and Coventry’s Manufacturing Technology Centre, which houses some of the most advanced manufacturing equipment in the world.
Like its surrounding towns and cities, Coventry benefits from excellent transport infrastructure, residing in the heart of the region’s logistics ‘golden triangle’. Access to the M6, M69 and M1 motorways makes it an ideal hub for logistics and distribution sectors, as well as ensuring access to a wide talent pool; it is estimated that some 75% of England’s population can reach Coventry within a two-hour drive.
Coventry has two main universities, Coventry University and Arden University, as well as Coventry College, the largest further education provider in the area. The University of Warwick lies on the outskirts of Coventry. Coventry has also sought to establish itself as a specialist in immersive technologies like augmented reality (AR), virtual reality (VR) and mixed reality (MR). Coventry and Warwickshire Creative Futures (CWCF) – a partnership between Coventry University and the University of Warwick – was launched to accelerate research, development, and innovation activity in these fields of immersive tech. Coventry and Warwickshire are also home to world-leading games studios including Ubisoft and Playground Games.
A small town renowned for its regency architecture and broad boulevards, Royal Leamington Spa is far from stuck in the past. In recent years, the town has traded its regal moniker for something more befitting its tech credentials – ‘Silicon Spa’, the gaming powerhouse.
The UK has the sixth largest gaming industry in the world and the West Midlands plays a key role in that success, boasting over 130 companies producing 25% of all UK gaming output. Leamington Spa is at the heart of this growth. In 2017, Leamington Spa was recognised by UKIE – the UK games industry trade association – as a national Centre of Excellence for the production of computer games and games technology.
More than 3,000 gaming professionals work in Leamington Spa, while industry giants including EA, Epic and Microsoft Studios have invested in the area.
The West Midlands’ eight universities, which have a combined science, technology, engineering and maths (STEM) student population of 87,000 – including some 8,000 who study computer science – play an important role in cementing Leamington Spa’s position as a hotbed for computer game development. STEAMhouse, which is powered by Birmingham City University, along with 1 Mill Street, are both collaborative facilities and workspaces for small game studios.
Wolverhampton was the third best place in the UK to start a business based on survival rates in 2021, according to a study by the School of Marketing, which analysed Office for National Statistics data on the number of new and closing businesses. It had
50.85% more new businesses than closures, with 1,780 business births and 1,180 deaths in 2021. Wolverhampton is evidently an attractive place for entrepreneurs to set up. The city’s central location of Wolverhampton within the UK – it has a catchment of 1.73 million people within a 30-minute drive – is complemented by its digital infrastructure, thanks to the West Midlands’ strong 5G and superfast broadband credentials.
Wolverhampton is ranked the top UK city for remote working according to the Remote Working Index owed largely to its excellent Wi-Fi connectivity. Wolverhampton’s average download speed is at 74.6Mbps, well above the UK average of 54.2Mbps. Jaguar Land Rover, Moog, UTC Aerospace and Wiggle are among the well-known companies in the area. Jaguar Land Rover recently announced that its Engine Manufacturing Centre, located in Wolverhampton, would be renamed the Electric Propulsion Manufacturing Centre, with the focus shifting to the production of electric drive units and battery packs.
The University of Wolverhampton Science Park, a joint venture between the University of Wolverhampton and Wolverhampton City Council and the University of Wolverhampton Telford Innovation Campus, are also important facets of the city’s tech ecosystem. Both premises aim to provide a complete solution for tech and knowledge-based businesses in the West Midlands. Meanwhile, West Midlands-based 5PRING has provided opportunities for UK startups to work with partner corporations to accelerate both businesses. The consortium ran accelerator activities in Wolverhampton, as well as Birmingham and Coventry.
The University of Wolverhampton’s £100m built environment super campus at Springfield was created to provide the skills for tomorrow’s workforce. As an International Centre for Urban Innovation, it is home to the West Midlands Construction University Technical College, the Elite Centre for Manufacturing Skills, the University’s School of Architecture and the Built Environment, and the National Brownfield Institute.
Surrounding ecosystem
Surrounding ecosystem
Birmingham and Coventry often dominate the limelight due to their size and the networks and infrastructure they provide for tech businesses, with other hubs such as Wolverhampton and Leamington Spa established for their own specialisms. However, there are other towns, cities and surrounding areas with their own ecosystems that play a crucial role in the overall growth and success of West Midlands tech.
The medieval town of Warwick is a proverbial stone’s throw from Royal Leamington Spa, while its prestigious university – the University of Warwick – is actually located on the outskirts of Coventry. Warwick helps feed into these respective tech and commercial hubs, while the Warwick Business School, part of the University of Warwick, has a strong international reputation and helps provide entrepreneurial talent for the West Midlands.
Warwick Innovation Centre, based at the Warwick Science Park, provides office space, workshops and business support services to businesses across the region, including a large number of tech firms. Meanwhile, the Warwick Innovation District (WID), powered by University of Warwick, describes itself as “a crucible of creators, technologist and humanitarians, collaborating and colliding with energy, purpose and direction”. Since its launch in 2020, SMEs within the WID have raised over £100m in funding, with more than 20,000 people working within the 700-plus businesses that have been started or supported in the facility.
A large market town located south-east of Birmingham, Solihull has attracted plenty of positive news stories in recent years thanks to its successes in the tech space. Gymshark is a jewel in the crown. The Solihull-based fitness apparel ecommerce company raised £200m in growth equity funding in 2020, becoming the West Midlands’ second-ever unicorn. The company, founded by Ben Francis as a 19-year-old out of his parents’ garage, has expanded internationally but retained its headquarters in Solihull.
In October 2022, the government selected Solihull for a new state-of-the-art UK Telecommunications Lab. The facility will act as a “secure research facility bringing together telecom operators, suppliers and academics to research and test innovative new ways of boosting the security, resilience and performance of the UK’s mobile networks,” the official announcement stated. It will create jobs and opportunities in the technology sector, particularly in telecoms and cybersecurity.
Hereford is a world leader in the fields of defence and security. It is estimated that the region is home to more than 200 companies in these sectors. Skylon Park is a 72-hectare site that houses the Hereford Enterprise Zone. Building on the area’s wealth of defence expertise and on the deep-rooted association Hereford has with UK special forces as the base of the SAS, it is the only enterprise zone in the UK with a defence and security focus.
Herefordshire Growth Hub is also co-located at Skylon Court – it offers a wide range of support and advice services to businesses. Meanwhile, the NMITE Future of Work Hub is a technology-focused site in Hereford. It exists to address the UK’s shortage of work-ready graduate engineers, offering an integrated engineering programme to train and nurture learners ready to tackle major global challenges – such as sustainable food production, access to safe water, and clean energy. Opening in December 2020, Paul Walker, CEO of Herefordshire Council, said: “NMITE is Herefordshire’s greatest opportunity in terms of levelling up our local economy, re-purposing our towns and cities and enabling social mobility within our communities.”
The rural county of Shropshire is a leading UK hub for agritech. Those credentials were underscored in 2018, when the Agri-EPI Centre opened its doors to bring together researchers, technology and engineering companies and food businesses, from farmers right through to retailers. The £4.4m research and development facility was created in partnership with Harper Adams University and is based on the university’s campus in Shropshire. Elsewhere, there is a leading agritech business park in Newport called Ni.PARK, which, like the Agri-EPI Centre, is a collaborative facility that connects industry and academia.
With Stoke-on-Trent at its centre, Staffordshire has had its fair share of tech success stories in recent years. Interest-free credit provider DivideBuy, a fintech based in Newcastle-under-Lyme, was named the overall winner of Deloitte's 2020 UK Technology Fast 50. Staffordshire has particularly strong specialisms in medtech – companies such as Biocomposites, Recipharma Cobra Biologics, Puricore, and TRB Chemedica have all been based at Keele University Science and Innovation Park – and engineering, with Zytek Automotive, Unimerco, Maier and Clayton Equipment all set up in the region.
The area also boasts a growing number of support programmes and dedicated commercial sites for tech businesses. For instance, the Information Technology Business Enhancement Programme is aimed at SMEs based in Staffordshire and Stoke-on-Trent. Its facilities include i54 South Staffordshire, Meaford Business Park, Liberty Park and the aforementioned Keele University Science and Innovation Park.
With Stoke-on-Trent at its centre, Staffordshire has had its fair share of tech success stories in recent years. Interest-free credit provider DivideBuy, a fintech based in Newcastle-under-Lyme, was named the overall winner of Deloitte's 2020 UK Technology Fast 50. Staffordshire has particularly strong specialisms in medtech – companies such as Biocomposites, Recipharma Cobra Biologics, Puricore, and TRB Chemedica have all been based at Keele University Science and Innovation Park – and engineering, with Zytek Automotive, Unimerco, Maier and Clayton Equipment all set up in the region.
The area also boasts a growing number of support programmes and dedicated commercial sites for tech businesses. For instance, the Information Technology Business Enhancement Programme is aimed at SMEs based in Staffordshire and Stoke-on-Trent. Its facilities include i54 South Staffordshire, Meaford Business Park, Liberty Park and the aforementioned Keele University Science and Innovation Park.
Warwick
Solihull
Hereford
Shropshire
Stakeholder view
“The West Midlands Combined Authority is committed to laying the foundations for business growth and 2023 sees the launch of the £33m West Midlands Innovation Accelerator, focused on turbocharging regional excellence in healthtech, medtech and cleantech. Combined with the Midlands Engine Investment Fund and the West Midlands Co-Investment Fund, we provide the confidence in investment to exploit our tech strengths to become the fastest-growing region outside of London by 2030.”
“When you visit the West Midlands, you will find a diverse, collaborative, inclusive and supportive tech ecosystem. The West Midland cluster has all the ingredients essential for tech companies, incubation and accelerators adjacent to universities. With strengths in gaming, edtech, digitalisation and manufacturing, and a strong tech talent pool with a healthy flow of investment across the West Midlands the future looks bright.”
Tech decision-maker view: data snapshot
Tech decision-maker view: data snapshot
To get a snapshot of how the West Midlands tech industry currently views itself, the region’s greatest strengths and challenges, and where it is heading, UKTN commissioned Censuswide to survey 100 decision-makers at West Midlands-based technology companies. Here’s what they said.
85% said the West Midlands is currently a good place to start and grow a technology business.
60% said that local government and the WMCA currently do enough to support the region’s tech businesses, while 40% say that more can be done.
56% said there is sufficient central government support for West Midlands tech businesses, but it remains a net positive.
61% believe the ecosystem is already internationally recognised.
67% said there is a clearly defined plan to grow the West Midlands tech ecosystem vs 33% who said there isn’t.
79% believe the West Midlands tech scene will grow rapidly in the next five years.
Cybersecurity, telecoms and ecommerce ranked as the region’s top tech sub-sectors.
Cybersecurity, closely followed by AI, were cited as the tech sub-sectors with the highest growth potential in the next five years. This was followed by robotics and the metaverse.
Strengths, challenges and opportunities
Strengths, challenges and opportunities
But there is always more that can be done, and further opportunities to grasp. While 61% of respondents said that the West Midlands is internationally recognised, its success stories could be more visible, with London-based tech companies enjoying much of the UK tech limelight.
“A major barrier is a lack of awareness and visibility in the highly competitive global market,” says Taran Singh, founder of Birmingham-based immersive experience creative agency Taran3D. “It can be difficult to build a brand and establish a reputation with limited resources”.
The West Midlands has an industrious history and is home to major manufacturing operations, such as the Jaguar Land Rover factory in Coventry. While times have changed, the history and groundwork of engineering remain enshrined in the region’s DNA, leading to strengths in autonomous vehicles and industry 4.0 companies.
"What the Midlands has done well is capitalising on the industries the regional economy was built on," says Aaron Baker, investor at BGF. "The automotive sector and its entire supply chain has seen exceptional tech innovation in the region – from batteries to electric vehicles – and that's because of the talent, experience, and rich heritage here. And this has evolved into global leading verticals in the sector, such as Leamington Spa's dominance in the gaming industry."
Taran Singh
Founder of Taran3D
Aaron Baker
Investor at BGF
“What the Midlands has done well is capitalising on the industries the regional economy was built on,” says Aaron Baker, investor at BGF. “The automotive sector and its entire supply chain has seen exceptional tech innovation in the region – from batteries to electric vehicles – and that’s because of the talent, experience, and rich heritage here. And this has evolved into global leading verticals in the sector, such as Leamington Spa’s dominance in the gaming industry.”
"What the Midlands has done well is capitalising on the industries the regional economy was built on," says Aaron Baker, investor at BGF. "The automotive sector and its entire supply chain has seen exceptional tech innovation in the region – from batteries to electric vehicles – and that's because of the talent, experience, and rich heritage here. And this has evolved into global leading verticals in the sector, such as Leamington Spa's dominance in the gaming industry."
Strengths
Q2. What, if anything, do you consider to be the biggest strength(s) of the West Midlands as a region to start and grow a technology business in?
The West Midlands Combined Authority region is the best-connected region in the UK for 5G, with Birmingham also ranking highest for 5G coverage among the top six cities in England and Scotland.
“Supercharged connectivity will be key to helping the region realise the benefits of digitisation over the coming years,” says Robert Franks, managing director of WM5G, a digital acceleration company. “It is essential to driving innovation, modernising public services and creating opportunities for all sections of society across the region.”
The launch of a government UK Telecommunications Lab in Solihull, and its 5G testbeds, further underscores the region’s connectivity credentials.
However, according to Matt Robinson, head of nations and regions at techUK, “digital infrastructure alone can’t provide growth”. He adds: “It’s an enabler for the tech sector, industry, public services, innovation and research” but points to the tech trade body’s research that calls for wider digital adoption in the region to spur growth.
These high-speed digital connections dovetail with the West Midlands’ efficient transport links. When asked to select three of the West Midlands’ strengths, transport and infrastructure came out on top. Coventry, for example, has access to the M6, M69 and M1 motorways, making it an ideal hub for logistics and distribution.
David Morgan, CEO and founder of Birmingham-based Black Space Technology, points to the potential of the delayed HS2 network to decrease travel time to London, along with Birmingham Airport.
Alex Arundale, chief people officer at B2B software company Advanced, says the region has “excellent travel links”. She adds: “Being based here enables us to take part in and contribute to one of the UK’s strongest-performing digital economies and ecosystems.”
The second-most selected strength by tech leaders is the collaboration between businesses and networks across the West Midlands. The West Midlands has bountiful startup accelerators and incubators supporting young tech companies with their growth journeys. These include the Forward Accelerator, the B Start-Up programme and the Creative ScaleUp Programme, among many others.
The appointment of Martin Ward as West Midlands Tech Commissioner in March is seen as the next step in bringing together the region’s voices. According to techUK’s Robinson: “It provides a point of leadership and interaction for the tech sector helping to build future digital strategies, engagement with industry, a voice to government on both a national and local level, and the opportunity to aid the digital plans for public services.”
The West Midlands’ thriving community of tech entrepreneurs, workers and advocates are critical to the region’s growth. Events like Birmingham Tech Week help bring these stakeholders together to champion the region’s tech industry.
“The West Midlands has a fantastic network of businesses, industry experts and investors that can help support businesses growth,” says Frances Howell, managing director and head of corporate banking – Midlands at HSBC UK. “We all have a role to play in growing the tech community in the West Midlands, and we can’t underestimate how powerful it is to learn from others that have been there and done it.”
The third-ranked strength of the West Midlands tech ecosystem, according to the region’s tech company senior managers, is diversity and inclusion in the workforce. This was closely followed by access to talent. The region’s thriving tech sector employs 144,000 people, according to job search engine Adzuna.
“Our history of being the industrial heartland of the UK has driven continuous innovation and development in our region,” says Howell. “This, paired with our diverse community and emerging talent demographic are just some of the key strengths that we have in the West Midlands which continues to spark our fire, igniting our innovation ecosystem.”
West Midlands tech companies enjoy access to a healthy flow of talent from the region’s colleges and universities. Proportionally, it has a higher number of higher education students – 187,000 – compared to other neighbouring regions.
“We have world-class universities and a skilled workforce which creates an amazing ecosystem to start or grow a business,” says Singh. “It's incredibly inspiring to see how the tech community in the West Midlands mobilised during the Commonwealth Games and that enthusiasm continues to thrive.”
Elizabeth Williams, partner at Gowling WLG, adds that when this is “coupled with a good cost of living to salary balance”, it puts the West Midlands “in an enviable position to acquire the best in UK tech talent”.
She adds: “This is a particularly important consideration for businesses and investors coming into the UK and can help businesses based in the West Midlands to attract investment.”
Challenges and opportunities
Q3. What, if anything, do you consider to be the biggest weaknesse(s) of the West Midlands as a region to start and grow a technology business in?
Access to funding is a nationwide challenge for high-growth tech startups. With rising interest rates bringing an end to an era of cheap capital and record levels of VC investment, it’s perhaps unsurprising to see funding chosen as the top challenge for West Midlands tech firms.
“The biggest barriers to growth for startup tech companies like ours are limited access to capital and funding,” says Singh. “As a new startup, it can be difficult to accelerate your business idea through investment due to perceived risk or lack of financial track record so most businesses will need to take some time to build that positive reputation.”
Tech companies across the West Midlands have collectively raised more than £850m in funding since 2020. Aaron Baker, investor at BGF, says there are “still challenges”.
He adds: “Historically, the region had a lack of available, flexible funding to support ambition in the region, which is a gap BGF was launched to fill.”
Despite the challenging macroeconomic conditions, organisations are creating additional funding avenues. Midlands Mindforge, a new investment firm announced in April, will support spinouts commercialising tech innovations born out of academia. Unlocking access to more overseas funding could also help to fill the gap, as demonstrated by Block, the US tech firm founded by Twitter creator Jack Dorsey, investing £2m into a Birmingham-based community business investment programme backing firms in the West Midlands.
“Investment from overseas could be a game changer to tech growth in the region if strategic and carefully managed,” says Elizabeth Williams, partner at Gowling WLG. “Access to talent and funding are essential for tech growth.”
The West Midlands Combined Authority, which represents 17 local authorities and three local enterprise partnerships, is highly active in the region’s tech ecosystem. Spearheaded by Andy Street, Mayor of the West Midlands, the WMCA provides support to TechWM, SuperTech, WM Health Technologies Cluster and Create Central through Shared Prosperity Funding.
The WMCA’s ‘ Plan for Growth’ report puts technology firmly at the heart of its strategy, identifying healthtech medtech and climate tech as areas that have a medium strength compared to the UK average, yet have high growth potential. Our survey of West Midlands tech decision-makers found that 60% believe there is currently sufficient local government support. However, it was also cited as a top area where more could be done.
This could be explained by some of the more recently announced tech support initiatives yet to filter down into the ecosystem. In March 2023, for example, the WMCA and West Midlands Pension Fund launched a £25m fund to invest in high-growth SMEs in the region. It will provide capital to small businesses working in areas such as green technology, advanced manufacturing, life sciences, creative and digital.
The WMCA is also launching the West Midlands Innovation Accelerator to bolster the region’s innovation and R&D capability and capacity to spark commercial growth and investment. It will see around £33m – stemming from a government levelling up fund – invested over the next three years on applied and translational research to spur commercial growth and bolster the region’s R&D capability.
However, some of the region’s tech companies appear happy to forge their own path. “We are blazing our own trail rather than waiting for government intervention,” says Advanced’s Arundale.