May 2023
Where next for
West Midlands tech?
Building on collaboration
Collaboration across the West Midlands ranked as one of the top strengths from Censuswide’s snapshot survey of the region’s tech company decision-makers. Startup support networks are abundant, but their volume and geographical divides can pose challenges and create silos. Joining these sometimes-fragmented dots can refine the existing collaboration in the region. This can include larger corporates increasing collaboration with startups in non-competitive areas, such as Gymshark supporting Energym through its accelerator. “Mentoring and sponsorship from the Gymsharks and other success stories are invaluable to nurture and support future talent,” says Elizabeth Williams, partner at Gowling WLG. “It is a long game with no quick wins.”
Creating more platforms for dialogue between West Midlands tech stakeholders is one lever that can support this. Events like Birmingham Tech Week are a prime example, and there are more recently announced initiatives that hold promise. The appointment of the West Midlands’ first tech commissioner in March to champion the region has drawn widespread support. “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,” says Matt Robinson, head of nations and regions, techUK. However, he adds there is a “gap in the current policy landscape to support and encourage digital adoption plans for SMEs across our economy”. This can be improved with more dialogue between the tech sector, SMEs, government and local authorities, Robinson adds.
Inspiration from other regions
The Northern Powerhouse – which includes Hull, Manchester, Liverpool, Leeds, Sheffield and Newcastle – is another area that the West Midlands can look to for learnings. Roland Emmans, head of technology sector and growth lending at HSBC UK, says that the Northern Powerhouse “achieved national profile, inward investment and organic business growth by pulling together under one banner a diverse range of public and private sector organisations, all reading from the same script and having a common approach”.
He adds that the “power of one voice and consistency of message can be very compelling” and that the “West Midlands is well placed to achieve this”. Similarly, Aaron Baker, investor at BGF, adds that the North West has “established a thriving tech ecosystem in recent years, which provides a helpful blueprint for other regions on the same journey”.
Identifying a common direction
Regions tend to develop flagship tech sectors based on their history and circumstances. The ‘golden triangle’ of Cambridge, Oxford and London excels in AI and other research-heavy subsectors like semiconductors due to its university specialisms. The South West is a leader in cybersecurity, stemming from the cluster of its defence bases, including GCHQ’s headquarters. However, the standout tech subsector in the West Midlands is less obvious.
The region’s industrial past and leading connectivity make industry 4.0 and the internet of things (IoT) natural candidates. But there are also clusters across the region leading the way in other areas, including software, gaming and telecoms, while decision-makers selected cybersecurity as the top current and highest growth potential sub-sector. These should not be ignored at the expense of identifying and nurturing the region’s ‘north star’ sector. Many of these tech sub-sectors overlap, and the recent acceleration in AI is likely to add to this. “The strengths and opportunities in the Midlands, from telecoms, AI, quantum, and machine learning to cutting-edge research, mean that growth is likely to come from AI and quantum technology, complemented by IoT,” says Robinson.
Where the West Midlands was once the heart of the pollutant-spewing industrial revolution, there is now scope to make it a key player in the UK’s green revolution. Startups like Modo Energy, Grid Edge and Onto are examples of this shift. Meanwhile, initiatives like Sustainability West Midlands, a not-for-profit giving net zero advice, and can help support the region’s ESG credentials.
Enhancing a global outlook
A key next step for the West Midlands tech industry is building on its existing international recognition to drive further overseas investment. In the 2020/21 financial year, the West Midlands attracted the most foreign direct investment (FDI) projects outside of London and the South East, according to government figures. It is the fourth year running that the region held this position, with automotive and software playing a leading role in attracting FDI. The Birmingham 2022 Commonwealth Games has only added to the West Midlands’ global visibility.
Cenuswide’s snapshot survey found that 61% of West Midlands-based tech decisionmakers believe that the ecosystem is already internationally recognised. The region’s policymakers and stakeholders must continue to capitalise on this momentum. Putting the West Midlands’ leading companies forward on the global stage, in parallel with clearly communicating the region’s tech business strengths, can encourage more tech companies to consider the West Midlands for UK expansion plans.
An upcoming trade mission by Tech West England Advocates, a grassroots entrepreneur community, is one such example of initiatives that can improve global visibility. “On current trends, the West Midlands has a significant opportunity to not just grow its own tech companies, startups, and scaleups, but to also attract companies and people from across the globe,” says Matt Robinson, head of nations and regions, techUK.
Increasing international reach could also boost the region’s exports. According to the West Midlands Quarterly Economic Snapshot for the fourth quarter of 2022, produced by the Greater Birmingham Chambers of Commerce, 27% of firms (from all sectors) located across the WMCA area reported an increase in export sales. Half (50%) stayed constant, while 23% reported a decrease in international sales. These are healthy signs for the region’s exports, but there is a clear opportunity for growth.
The future is bright
The Censuswide data indicates positive sentiments for West Midlands tech growth potential. The majority – 67% – of senior managers said there is a clear roadmap to grow the ecosystem. It is down to the region’s stakeholders to execute the plan and foster the right conditions for innovators.
Central government initiatives, such as low-tax investment zones, have the potential to provide an additional boost. Robinson says these investment zones “have to be tech zones” and “encourage further test pilots” as with 5G and autonomous vehicle trials. Taran Singh, founder of Taran3D, says tax incentives and extra VC support in the region “would go a long way in supporting new businesses”. Singh adds: “With government and commercial investment in the region, larger organisations choosing to relocate and the establishment of new tech hubs that can support research and innovative new ideas, I think the future looks very bright for the West Midlands.”
Thank you to our sponsors
We are delighted to be sponsoring this report which is shining a light on the West Midlands. For HSBC, the Midlands has played a key role in our history, having been home to the bank for many years. The first branch was opened here in 1836, and we chose to locate our UK head office in Birmingham in 2018 in recognition of the fact it is a dynamic and entrepreneurial region, offering an attractive home for businesses at the heart of the UK.
We are excited and delighted with the report's findings, which position the West Midlands as a welcoming force for innovation, inclusivity, and most importantly for growth. The days of the UK's tech sector being firmly within the M25 are most certainly over, and we have seen first-hand how the tech ecosystem has moved from strength to strength over the years.
The West Midlands was at the core of the last industrial revolution and is well equipped to be at the heart of the next, with a strong and digitally native workforce, internationally renowned universities, and entrepreneurial spirit. HSBC has a long history of supporting growth and innovation. The tech sector has always been and remains a strategic priority for HSBC UK. Our recent acquisition of SVB UK demonstrates our commitment to supporting the high-growth ecosystem. Together we look forward to opening up a world of opportunity for even more businesses in the UK and across the world.
 |
Roland Emmans |
 |
The West Midlands is home to an array of impressive technology businesses that are driving innovation and positioning the region as one of the fastest-growing tech and digital economies outside of London. At BGF we have invested over £600m in the region since we launched in 2011 and a significant portion of this capital has
gone to supporting technology businesses.
Our team is always on the lookout to partner with ambitious businesses, providing them with the strategic support and capital to compete on a global stage. BGF is now one of the largest and most experienced investors on a national scale. However, we're also hyper-local with a network of 15 regional offices, including our West Midlands team office in Birmingham. This approach provides local businesses with access to a powerful BGF ecosystem, supporting national and international
expansion through our relationships, collaborative culture and proven experience.
We're committed to driving growth and value creation in our portfolio and we look
forward to backing many more exciting tech companies now and in the future.
 |
Aaron Baker
|  |
Many businesses are facing challenging operational and funding conditions that can inhibit growth. We believe that in the West Midlands, collaboration and building a culture of togetherness and providing an infrastructure that supports entrepreneurship is vital. As a firm, we have been committed to supporting dynamic, fast-growing businesses in the West Midlands for nearly 190 years - helping our
clients to navigate choppy waters and ensure their continued success.
The West Midlands has an impressive track record of leading and driving growth, whether it be its role in an industrial revolution or the recent success of delivering the successful B2022 Commonwealth Games during a pandemic. The region has grit, resilience and shed loads of talent, and with some of the world's leading higher education facilities based in the West Midlands and its reputation for innovation and leadership, we are well placed for this next phase and driving growth in the West
Midlands' tech sector.
This report and its findings can help identify the challenges and opportunities and bring together the region's tech sector to problem-solve and overcome the tough economic environment most businesses are facing. The diversity of the West Midlands is an asset for us to explore and probe further to capitalise on that diversity
of thought and its significant value.
The West Midlands Tech Review is an excellent prospectus for the region's tech market and we are delighted to put our support behind the report. We look forward to working with each of the Review's sponsors to help cement the West Midlands as
the UK's fastest-growing tech market.
 |
Elizabeth Williams |
 |
With so many amazing things happening across our region's tech sector, we felt it was important to highlight and acknowledge some of them. That's why we've partnered with UKTN on this year's West Midlands Tech Review Report. It's amazing to see our tech sector go from strength to strength and this is a testament to the incredible people and organisations that make up our wonderfully diverse, vibrant
and innovative region.
The fourth industrial revolution is now well and truly underway and is transforming how we see and interact with the world. Our region was at the heart of the first
industrial revolution, and whilst the world may have changed remarkably, our ingenuity and entrepreneurial spirit remain the same. Combine this with our burgeoning tech and innovation sector, and we once again have an opportunity to
lead the way.
Together, we've already built a solid foundation and we now have the momentum to a become globally recognised tech hub. Tech companies from around the world are already choosing our region because of our amazing pool of talent and dynamic ecosystem. However, to truly achieve our full potential we must continue to work
together to create more opportunities for everyone. Our commitment to you is to invest more in our region's tech sector, providing businesses with world-class support, funding and talent. Our ask of you is to join us
on the journey and help make the region a global tech superpower.
 |
Yiannis Maos |  |
We are delighted to be sponsoring this report which is shining a light on the West Midlands. For HSBC, the Midlands has played a key role in our history, having been home to the bank for many years. The first branch was opened here in 1836, and we chose to locate our UK head office in Birmingham in 2018 in recognition of the fact it is a dynamic and entrepreneurial region, offering an attractive home for businesses at the heart of the UK.
We are excited and delighted with the report's findings, which position the West Midlands as a welcoming force for innovation, inclusivity, and most importantly for growth. The days of the UK's tech sector being firmly within the M25 are most certainly over, and we have seen first-hand how the tech ecosystem has moved from strength to strength over the years.
The West Midlands was at the core of the last industrial revolution and is well equipped to be at the heart of the next, with a strong and digitally native workforce, internationally renowned universities, and entrepreneurial spirit. HSBC has a long history of supporting growth and innovation. The tech sector has always been and remains a strategic priority for HSBC UK. Our recent acquisition of SVB UK demonstrates our commitment to supporting the high-growth ecosystem. Together we look forward to opening up a world of opportunity for even more businesses in the UK and across the world.
|
|
|
Roland Emmans |
The West Midlands is home to an array of impressive technology businesses that are driving innovation and positioning the region as one of the fastest-growing tech and digital economies outside of London. At BGF, we have invested over £600m in the region since we launched in 2011, and a significant portion of this capital has gone to supporting technology businesses.
Our team is always on the lookout to partner with ambitious businesses, providing them with the strategic support and capital to compete on a global stage. BGF is now one of the largest and most experienced investors on a national scale. However, we're also hyper-local with a network of 15 regional offices, including our West Midlands team office in Birmingham. This approach provides local businesses with access to a powerful BGF ecosystem, supporting national and international expansion through our relationships, collaborative culture, and proven experience.
We're committed to driving growth and value creation in our portfolio, and we look forward to backing many more exciting tech companies now and in the future.
|
|
|
Aaron Baker |
Many businesses are facing challenging operational and funding conditions that can inhibit growth. We believe that in the West Midlands, collaboration and building a culture of togetherness and providing an infrastructure that supports entrepreneurship is vital. As a firm, we have been committed to supporting dynamic, fast-growing businesses in the West Midlands for nearly 190 years - helping our
clients to navigate choppy waters and ensure their continued success.
The West Midlands has an impressive track record of leading and driving growth, whether it be its role in an industrial revolution or the recent success of delivering the successful B2022 Commonwealth Games during a pandemic. The region has grit, resilience and shed loads of talent, and with some of the world's leading higher education facilities based in the West Midlands and its reputation for innovation and leadership, we are well placed for this next phase and driving growth in the West
Midlands' tech sector.
This report and its findings can help identify the challenges and opportunities and bring together the region's tech sector to problem-solve and overcome the tough economic environment most businesses are facing. The diversity of the West Midlands is an asset for us to explore and probe further to capitalize on that diversity
of thought and its significant value.
The West Midlands Tech Review is an excellent prospectus for the region's tech market and we are delighted to put our support behind the report. We look forward to working with each of the Review's sponsors to help cement the West Midlands as
the UK's fastest-growing tech market.
|
|
|
Elizabeth Williams |
With so many amazing things happening across our region's tech sector, we felt it was important to highlight and acknowledge some of them. That's why we've partnered with UKTN on this year's West Midlands Tech Review Report. It's amazing to see our tech sector go from strength to strength, and this is a testament to the incredible people and organizations that make up our wonderfully diverse, vibrant, and innovative region.
The fourth industrial revolution is now well and truly underway and is transforming how we see and interact with the world. Our region was at the heart of the first industrial revolution, and whilst the world may have changed remarkably, our ingenuity and entrepreneurial spirit remain the same. Combine this with our burgeoning tech and innovation sector, and we once again have an opportunity to lead the way.
Together, we've already built a solid foundation, and we now have the momentum to become a globally recognized tech hub. Tech companies from around the world are already choosing our region because of our amazing pool of talent and dynamic ecosystem. However, to truly achieve our full potential, we must continue to work together to create more opportunities for everyone. Our commitment to you is to invest more in our region's tech sector, providing businesses with world-class support, funding, and talent. Our ask of you is to join us on the journey and help make the region a global tech superpower.
|
|
|
Yiannis Maos |
