30 October, 2017
The Midlands’ technology scene – challenging London
We recently decided to expand our presence in the Midlands, and rightly so, as the opportunities for technology companies in this region seem endless. As a vibrant startup scene, with universities producing tech literate graduates and high-street names moving or expanding their IT operations to the Midlands, now is definitely the right time for us and many other technology companies to take advantage of what this region has to offer. Here I’ll take a look at the tech scene as a whole, offering my insight into what’s driving progress and why the Midlands’ tech boom is set to continue.
With Birmingham boasting the fastest-growing business startup scene outside of London, and Nottingham leading the East Midlands technology scenebuilding up a strong technology scene. Forecast to boost the region’s economy by over £1.6 billon every year, the Midlands’ digital tech scene will remain a significant money-maker for the region overall
While the West Midlands in 2015 had 11,200 digital enterprises, representing 7 per cent of overall enterprises in this region, the East Midlands’ 8,400 made up 5 per cent of its enterprise numbers. Only recently, Lincolnshire was recognised by the Business Lincolnshire Growth Hub as having a digital sector worth £779 million. Nottingham was also identified as a tech growth hotspot, thanks to its digital technology businesses, including fintech startups such as Blenheim Chalcot, contributing £835 million value to the city’s economy.
In 2016, StartUp Britain analysed Companies House data, which showed that Greater Birmingham has one of the largest tech clusters in the UK with 40,000+ employed in the sector, with startups covering IT consultancy, apps and software development, information management services and mobile payment platforms. Many of these startups’ technology endeavors are ambitious and, as they bring new products to market, Quality Assurance should be high on the priority list, to ensure that the products and services are robust and less likely to fail.
This is where software testing companies like Edge Testing Solutions come in. Having opened our Birmingham office in 2013, we have grown over the past four years in the city thanks to the technical skill set of the region’s universities offering us a hands-on workforce that can meet our Midlands’ and UK-wide client’s business and IT knowledge requirements. We are planning to add a further 60 Birmingham-based testers and recently revealed our £10.1 million revenue, which is ahead of our three year growth predictions.
We offer our clients a host of software testing services, including test management and planning, development support testing, automated testing, user experience testing and performance and security testing – all essential testing processes during the technology innovation lifecycle.
Arc of innovation
For startups, initiatives such as the Innovation Birmingham offer campus facilities, providing them with everything they need from office suites and meeting rooms, as required, to conference facilities and even hot-desks. Innovation Birmingham has over 120 digital technology businesses, from startups to companies with million-pound turnovers.
In the East Midlands, one tech initiative, D2N2, a local enterprise partnership for Derby and Nottingham, was set up to support new businesses and help to establish themselves in those cities, while also assisting existing businesses with their innovation and expansion strategies. D2N2 reported that Derby was named the “Start Up Capital” of the UK ahead of London in 2015, and highlighted that 12 per cent of the workforce is employed in the digital or technology sectors.
The West Midlands’ tech sector was named fourth biggest in the UK and this positioning may in part be thanks to the local initiatives supporting Midlands technology scene’s boom, including the West Midlands Growth Company. Created to co-ordinate the region’s business and tourism assets to secure investment from around the world, it works in partnership with other supporting players including LEPs, local authorities, Growth Hubs, universities and the private sector.
Home to technology stalwarts such as the IT Services giant SCC Group and provider of computer products and services XMA, as well as The Sunday Times Tech Track 100 fast-growing technology firms such as CommAgility, UniDays and Littlefish, the Midlands is considered to be a better place to set up than London, thanks to the region’s employment potential.
The number of digital tech jobs across the Midlands is rising too, with over 23,000 in Leicester, 19,000+ in Nottingham, and 7,600+ in Worcester and Malvern, and growing, so finding the right talent for their business is a major consideration for the Midlands’ digital tech community. Over 25 per cent of companies describe sourcing the right talent as a major challenge and 50 per cent highlighted a shortage of highly skilled employees as their biggest challenge – both concerns that we are mitigating with our Edge Academy.
To fulfil the increasing demand from both public and private sector clients across the Midlands, we’re hiring new recruits that are both already experienced or have recently graduated. By offering students the opportunity to learn on the job, and be taught by Edge’s Test Managers and Test Analysts, our own Edge Academy aims to reduce the skills gap and create a dedicated workforce that will stay with us as our company evolves within its Midlands’ location.
As well as “home grown” firms, the Midlands is attracting teams from both the South and North of the UK. While the financial sector is moving resources to the Midlands, with global players such as Deutsche Bank and HSBC relocating teams here over the past five years, the region’s real success and growth has been as a result of its diverse technology scene.
Our headquarters are in Scotland, but the sheer vibrancy and opportunities in the Midlands has led us to expand our presence here. We recently expanded our Digital Test Hub, through a new team in Birmingham with the aim of creating over 60 new jobs in the area over the next two years.
For services companies, being located in Birmingham means that teams are easily accessible for clients around the Midlands.
In terms of new technologies, the Midlands is at the forefront of The Internet of Things with driverless cars, smart home technologies, mobile apps and more. And, as the tech sector grows, demand for services such as testing will also increase as companies look to mitigate risks and prevent downtime to reduce business losses and any damage to their reputation.
The future for technology companies in the region will only improve as construction of the HS2 national high-speed rail network, linking the Midlands to London and other major cities, creates around 1,500 jobs in Birmingham.
The cost of office space in London versus Birmingham, Coventry and Nottingham perfectly illustrates the advantage of former London brands relocating to the Midlands as, with an average price of £25 per square foot in Birmingham, £20 in Nottingham and less than £10 in Coventry, offices here are a mere fraction of the £170 per square foot average that London-based companies are forking out.
While some would argue that the extra costs incurred are offset by the huge market accessible to a London-based business, others are now recognizing that the HS2 plan means that the distance between the Midlands and London will soon be minimal, which may see a number of other businesses, such as Deutsche Bank and HSBC, relocating to the region. The HS2 infrastructure project has also seen former factories, such as the Typhoo tea plant in Birmingham, being transformed into tech hubs to cope with the anticipated movement of businesses from London to the Midlands increasing once the railway network is completed.
However, with the entire Midlands region still positioned as one of the fastest-growing tech economies UK-wide, we don’t anticipate the number of startups being born in the region diminishing either.
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