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May 2023

Where next for
West Midlands tech?

The West Midlands tech ecosystem is in a strong position relative to other UK regions. In the decade to 2019, the overall West Midlands economy grew faster than anywhere outside of London, according to figures from the Office of National Statistics. The West Midlands’ infrastructure and networks, along with the quality and quantity of its tech companies, indicate the region’s tech ecosystem is maturing. It is less startup, more scaleup. 
As with startup growth, scaling a tech ecosystem presents a different set of challenges and opportunities. The focus now for the region is to take its tech sector to the next level while recapturing previous growth levels. Regaining the position as the fastest growing region outside of London would require the West Midlands to deliver an extra £750m – £1bn of gross value added and an extra 15,000 – 20,000 jobs, according to the WMCA’s Plan for Growth. Tech is well positioned to play a key role in this.

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.”

Building on collaboration

Inspiration from other regions

According to techUK’s Digital Capital Index 2022 – which takes into account skills, digital adoption and R&D levels, among other factors – the West Midlands ranks fifth out of the UK’s nations and regions, behind only Greater London, the South East, East of England and South West. So, what can the West Midlands learn from other regions?  Williams points to the “excellent track record” of the Silicon Gorge area in the South West for producing “innovative tech companies” and its “thriving creative industry”. She adds that this success is “underpinned by their connection to high-quality universities in the region which have good relationships with local accelerator programmes and support the growth of new business”. 
Inspiration from other regions

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.

Identifying a common direction

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.

Enhancing a global outlook

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. 

Taran Singh

Thank you to our sponsors

Invoice financing
BGF
BGF

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
Investor, BGF Midlands

BGF
Gowling WLG

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
Partner, Gowling WLG

Business loans
In collaboration with TechWM

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
CEO & founder, TechWM

Invoice financing
BGF
BGF

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
Investor, BGF Midlands

BGF
Gowling WLG

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
Partner, Gowling WLG

Business loans
In collaboration with TechWM

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
CEO & founder, TechWM

Regional tech report: West Midlands