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Why UK tech needs to look beyond London to thrive long-term

(Image credit: Image source: Shutterstock/everything possible)

In the wake of Covid-19 there’s been a realization among employees, and hopefully, employers, that London and the big city career move isn’t essential to success. This could be a particularly defining moment for the UK’s technology sector, which of all our economic sectors, is most resilient to the types of changes and challenges brought about by the pandemic. 

There are two key factors at play. The first is the move to remote work, which means that employees no longer need to be tied to a corporate headquarters. Technology companies were already leading the remote and home working trends prior to the pandemic, with more and more companies building this into their resilience planning and employee benefits.

The second factor is that with more remote teams, businesses no longer need to locate themselves with the current talent bubble that is our capital city. You don’t have to worry about whether people are commuting because there are fewer people commuting. For businesses currently loaded down with expensive, city center office spaces and little chance they’ll be at full capacity in the future, there’s been a realization about just how much of a bottom-line impact having a London presence really has.

The outcome of these two factors is that technology businesses can be empowered to take advantage of the competitive advantages the rest of the UK economy has to offer. Prior to the pandemic there were green shots of tech hubs, incubators and ecosystems popping up around the UK. Manchester was the second most attractive UK city for tech investment in 2019, ahead of Cambridge, scooping $687.6m in venture capital funding. 

Most of our big universities are outside the capital, big tech companies are seeing the competitive advantage of cities like Manchester, and a year of remote working might just be the straw that breaks the camel's back. This powerful combination of research, talent and business could bring on a new era for the diversity and resilience of the UK’s technology ecosystem.

Redefining the Northern economy  

The North/South divide comes as much from a cultural problem as an economic one. It’s easy to fall back on stereotypes about the Northern economy. A former industrial heartland on an inescapable path to decline....that stereotype is then reflected back in the plans and policies put forwards to support our region. The reality is very different - not least because each town and city has its own expertise, history and challenges which are rarely acknowledged or understood. 

While areas in the North have their own home-grown startup success stories, we need to promote the North as a top contender for businesses looking to set up or overseas companies establishing bases in the UK. Similarly, many businesses founded here see their next step for growth as opening a London office. We need to find a way to harness and retain this talent in the region. Businesses need to plot their next expansion as opening a new office in Leeds, Manchester or Newcastle, if they need to open a new office at all.

The pandemic is slowly unraveling the old story that workers are only productive when they’re at their desks. For tech companies in particular, many were already offering partial work from home opportunities before the pandemic. What we know we need is the business infrastructure to follow remote workers and establish proper, formal links to different regions. 

When you look at the numbers, a move outside of London makes sense, especially for technology companies geared towards embracing remote working. Cheaper office space, better quality of life, similar access to the important infrastructure. 

Of course, technology is about more than just start-ups. As big companies, venture capital firms and other key players in the ecosystem also re-evaluate what a London presence is costing them, we’re likely to see a joint move by the industry to spread out and diversify their geographical presence.

Talent and innovation 

Our region is home to top research universities and thousands of talented students. Manchester University is where the world's first stored-program computer was developed in 1948. As the technology industry looks to the next wave of innovation, proximity to research and academics which are at the pioneering edge of development could be a huge advantage. 

We also need to reinforce to students that they don’t need to move to London in order to access top jobs and opportunities for development. The past year has really put work-life balance into perspective for a lot of people. It’s shown that you can do most jobs remotely (at least part of the time) and maybe London doesn’t have to be the go-to choice for post-Graduation opportunities. 

Not centering your business around London also makes a huge difference to your hiring abilities too. Instead of just being able to attract whatever talent lives within a 45-minute commute, you have the entire UK workforce at your (remote) doorstep.

The next batch of graduates should go into their first jobs and get a phone, laptop and a co-working pass. Small startups and entrepreneurs should network and swap ideas with other small businesses they share an office with, find new customers and tap into the opportunities of both the local and global markets. Big companies can focus on finally living up to all the flexible working policies they’ve been promising. 

From survival mode to growth mode

The economy is at a crossroads. As growth and consumer confidence returns, we have a choice to make. Do we want to simply return to the same place? A London-centric economy driven, reliant on big-businesses for jobs. Or do we want to empower small businesses to lead us out of this crisis and make us more resilient to the next one? 

It’s clear from surveys and polling that most people don’t want to reset the clock. Tech companies have been resilient during the pandemic. As we now ease out of lockdown there’s a new opportunity for them to take a step back and reconsider their role in the UK economy, and seize the advantages of both remote working and non-London centricity.

Michael Edwards, founder, The Northern Affinity

Michael Edwards is founder of The Northern Affinity, a business community based across the north which provides a platform for business owners to connect, collaborate and support one another.