Regional clusters, not just major hubs, will drive the next phase of UK tech growth, but access to talent and funding remains a hurdle.
That was the message from key industry leaders and policymakers at the launch of UK Tech Week in Manchester on Monday, who highlighted both the growing momentum across the regions and the obstacles the tech economy still faces.
Speaking at Bruntwood SciTech’s newly opened No.3 Circle Square on 16 March, AI and Online Safety Minister Kanishka Narayan said the UK has an opportunity not just to remain “very much front of the queue when it comes to tech and AI globally”, but to “chase the future and to spread opportunity alongside it” rather than concentrating growth in a small number of locations.
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Pointing to regional strengths, from semiconductors in Bristol and South Wales to advanced manufacturing in Sheffield, alongside new AI Growth Zones in the North East and Lanarkshire, he said the government is focused on “anchoring infrastructure investments” across the country.
“But alongside that, it’s not just creating data centres but creating ecosystems which are ultimately sources of hope and opportunity for young people growing up in those places,” he said.
He also highlighted the role of the Local Innovation Partnerships Fund (LIPF), a £500m UKRI-led programme running to 2031, designed to drive regional growth by backing local innovation clusters. It builds on initiatives such as the Regional Tech Booster, which he said have helped “sow the seeds” of distinct identities across the UK’s tech ecosystems.
“We are leaning into the cluster strengths of each area, making sure that each of you feel supported in the dreams and hopes that you have in technology,” he added.
Now in its third year, UK Tech Week brings together more than 50 ecosystem partners. Founded by Stuart Clarke MBE and co-organised with the Startup Coalition, it spans dozens of events from Plymouth and Ipswich to Glasgow, Sunderland and London, connecting founders, investors and policymakers to explore how the UK’s tech vision can be delivered.
We’ve pulled together some of the top takeaways from the event below.
It’s all about “cluster-led” growth
A consistent theme throughout the afternoon was the growing importance of “cluster-led” growth in shaping the UK’s tech future.
George Windsor, head of research and development at Sunderland Software City, said now is a “really good time to be thinking about cluster-led growth” both in the UK and globally.
“Innovation is not distributed evenly across countries. It’s not even distributed evenly across different regions within countries. It’s concentrated in clusters,” he said, citing data showing that two-thirds of global venture capital is concentrated in fewer than 30 clusters worldwide.
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While cities like London continue to dominate investment, Windsor said the narrative is shifting as government analysis of innovation activity has identified ‘thousands’ of specialised clusters across the UK.
“The story that we often tell is centered around London, and it’s a national story. But increasingly, the story is becoming regional, and it’s becoming cluster-based.”
He added that while the UK’s regions are not short of ambition, they often lack the infrastructure needed to test and scale ideas.
He highlighted how programmes like the Regional Tech Booster have started to address that gap and the “importance” of initiatives like StartUp Studio in Leeds to strengthen tech ecosystems at earlier stages.
“If innovation ecosystems are complex, which we generally believe they are, then we need more complex policy mechanisms to enable their support, and we need more nuance, perhaps than we’ve seen in the past around their support.”
He stressed that “strong tech ecosystems” depend on more than just scale too.
“Strength is not just size. It is about connectivity. It is about funding. It is about leadership. And infrastructure isn’t just physical, it is also organisational.
“The future of the UK tech ecosystem will not be built in one place. It won’t be built in a couple of places, not a handful of places. It will be built in many places.”
Skills, investment and collaboration in focus
The event closed with a panel session chaired by Dom Hallas, executive director of the Startup Coalition, alongside Katherine Megson, head of innovation and growth at Bruntwood SciTech; Cat Mawdsley of Lancashire Digital Hub; and Katie Gallagher OBE, managing director of Manchester Digital.
The discussion mainly centred on persistent challenges around skills, talent and access to investment across regional ecosystems.
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On funding, Gallagher pointed to a “gap” between early-stage and scale-up investment in regions like Manchester, adding she would “love to see more” specialist angel activity as the region’s strengths continue to emerge.
Megson highlighted efforts to address that, mentioning a recent early-stage Northern investor showcase hosted by Bruntwood SciTech in partnership with The Growth Company, which brought together more than 150 investors, founders and ecosystem leaders.
“What came out of that, really loud and clear from a lot of the panels from investors, is they’re willing to come North, but they just need to know who they need to come and see. We need to showcase who these people are and we, as ecosystem partners, need to really highlight them.
“If we can collaborate more, we can showcase more, and then hopefully we get more investment.”
Mawdsley added that areas like Lancashire have historically been “overlooked”, but initiatives such as Fhunded — Lancashire County Council’s early-stage investment programme — are helping to attract investors to the region and there’s plenty of “shaping” being done.
“What we’re all saying is when you have these clusters and you have these ecosystems, it’s about how it works in collaboration. You’ve got to embrace, embed, wrap around, and intertwine all of these things.”
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On skills, Gallagher pointed to the government’s newly announced £1bn youth employment drive, designed to create 200,000 jobs, with the initiative including an Apprenticeship Incentive of £2,000 for each new employee aged 16-24 taken on by an SME.
But she questioned how effective it would be in practice. Instead, she highlighted the need to rethink entry-level roles in an AI-driven economy.
“Start-ups are not hiring in the same way now because everything can be automated and people can Vibecode. The amount of people they have to hire to grow a business is tiny,” she said, warning that while this can drive “disproportionate wealth creation per head”, it also limits job creation at scale.
“So we’ve got a problem to solve there, and I don’t know what the solution is. The skills thing is system-wide. No one’s really got on and tackled it.”
She also referenced data from Manchester Digital’s Sector Insights report, which found around a quarter of SMEs are not hiring early-stage talent because the “productivity hit is too much for them”
“This is where I really think the ecosystem and customer organisations can play a role. How do you take some of that early productivity hit on those companies?” she asked.
The panel’s calls to government included longer-term programmes, increased grant funding at startup level, greater regional consistency, and stronger supply chain opportunities — alongside “front door” initiatives that “don’t just promise, but actually deliver”.
