Why Liverpool's tech scene is set for a boom
Jonathon Clark, Business and Technology Manager at Activate - a Liverpool-based part-ERDF funded business support and funding programme - explains why Liverpool City Region’s burgeoning tech scene is set to boom in 2020 and beyond.
In my day job I have the pleasure of working closely with the many startups and scale-ups that make up Liverpool City Region’s (LCR) vibrant tech scene.
Over the last 25 years, the city region has reinvented itself as a hub for innovation and creativity. These get thrown around quite a lot as buzzwords - but I honestly see an exceptional level of ingenuity in the products and processes which businesses here build as a legacy of the testing business and social conditions some decades ago.
Starting with its history of gaming and digital applications, the region has moved into new frontiers such as MedTech, EdTech, digital media, and many more. I can say with some confidence that this is isn’t a trend that’s going to stop. With the evolution of hubs such as the Baltic Triangle and the Knowledge Quarter, there’s never been a more exciting time to live, work, and found a business in Liverpool City Region.
Last year, Activate launched the first ever LCR Tech Climbers campaign. We surveyed some of the city region’s top tech scale-up businesses and created a list of the city region’s fastest-growing and most innovative tech scale-ups. Using data collected from the survey, we also launched the LCR Tech Climbers Report to capture and celebrate the transformative spirit of the city region’s fast-developing technology sector.
Liverpool City Region is a hotspot for tomorrow’s tech talent
Nationally and globally, we hear a lot about the tech skills shortage. Reports such as KPMG and Harvey Nash’s annual CIO survey suggests that tech skills shortages may be at an all-time high. It will always be a challenge for startups and scaling businesses to find the right team members that provide them with the skills they need in the short term, as well as for their long-term growth.
Having said this, our report suggested that this might not be the case in the LCR - over 50% of our respondents said that access to talent was a huge benefit of being based here.
So why might LCR be bucking the trend? To start, we have a high density of quality universities and colleges producing work-ready individuals - and thanks to the city’s exciting lifestyle and affordable living costs, many of them choose to stay in the area to start their careers after they finish training.
In addition to that, the region has plenty of programmes designed to bolster this talent pipeline, such as InnovateHER and Agent Academy. For younger people swaying strongly towards taking a job in the industry, there is also ‘The Studio’ - the country’s first digital studio school. These programmes and facilities, and the fantastic people who operate them, work with young people to help them develop the skills, confidence and knowledge they need to pursue future careers in the tech sector.
Tech companies are predicting huge growth - even in political uncertainty
One of the most pleasantly surprising findings from the report was that many of Liverpool City Region’s tech scale-ups are predicting significant growth in the next year.
Just 53 of the surveyed businesses were predicting the creation of 700 jobs between them, and while 51% said they were already trading in international markets successfully, a further 43% said they had overseas deals in the pipeline. In light of Brexit uncertainty, the positivity of the city region’s tech businesses when it comes to international trading and job creation is a trailblazer for other industries, and shows just how much the region’s tech industry has potential to bring significant economic and social impact.
There’s more support now than ever to help businesses grow
Not everybody can bootstrap. For most businesses, equity and debt-based finance is integral as it allows businesses to grow their teams, the means to test and develop new products, the ability to launch in new territories, and the resources to invest in marketing. It’s an issue that comes up repeatedly for startups all over Europe - there simply isn’t as much liquidity around (at least not without warm introductions) as there is in the USA or Far East.
Positively, the Tech Climbers report revealed that 77% of businesses surveyed had received financial support, and only 29% said that funding was a challenge. From my conversations with businesses on Activate, however, it’s clear that there's still a huge appetite for such funding in the city region - a further 78% were seeking further funding with the intention of scaling their business.
I'd argue that we are starting to see a response to this appetite - the recent announcement of the £75 million business growth package announced by the Metro Mayor, the bulk of which will kick off in 2020, is set to stimulate activity in the sector locally.
What’s more, we’re seeing increased support from venture funds and private equity firms too. We’ve seen continued support and interest from local investors. We also had Praetura Ventures' support on the creation of the Tech Climbers report - it has invested over £100m into early-stage businesses and has a passion for supporting entrepreneurs in the North and in the LCR.
Support isn’t necessarily just about investment, however. A significant number of our survey respondents expressed that access to business support resources is a key benefit of being located in Liverpool. The region has a strong network of programmes which gives business the support they need to grow.
Statistics from the Local Growth Hub show that 2,523 businesses accessed support through their directory or constituent partners between April and October 2019. In addition to those accessing support through Activate, respondents cited the city region’s universities, chambers, and other organisations such as The Women’s Organisation and Barclays Eagle Labs as key to their development. These support services are plentiful here and are vital to helping businesses expand their network, find funding, run their business, bring products to market, and recruit experts.