The UK’s tech sector’s London-centric focus stifles regional innovation and growth, creating significant disparities across the country. To address these imbalances, a comprehensive regional policy is needed to cultivate diverse tech ecosystems, fostering economic development both locally and nationally.
A London-centric status quo
The UK’s tech sector is built in London. This is not overwhelmingly surprising, as access to capital is easiest near the City, more highly skilled professionals are based there, and most new tech startups are the brainchild of frustrated coders, programmers or financial professionals from bigger companies.
But it is also unsurprising because the UK’s tech sector was built for London.
This is perhaps a more controversial argument, but it shouldn’t be. It has been identified time and time again. Four years ago, NESTA published a report which showed that there is an underinvestment of £4bn in R&D outside of London and the South East. A year later, the Government commissioned and published its first review of regional tech ecosystems. To be blunt, Whitehall has mostly been interested in building a tech ecosystem in order to grow national capacity, rather than as a part of regional economic development. This has meant predominantly doubling down on London, with some smaller strategic investments elsewhere.
Private sector jobs and employment have for the most part followed that public investment in intellectual capital, contributing to our many regional divides.
Similarly, the state has developed the majority of the key tech institutions in London. Pretty much every quango with a tangential relationship with tech built over the last decade and a half has been put in the capital. The Crick Institute, The Responsible Technology Adoption Unit, Tech City, Tech Nation, The Open Data Institute, The Advanced Research and Invention Agency (ARIA), The Alan Turing Institute, and The Ada Lovelace Institute all have their headquarters in the capital.
The one time central Government decided to give regional policy for tech a go, it started a new quango called Tech North in 2024, at the time billed as ‘a new tech hub for the North of England’. There was widespread enthusiasm about the project and about the choice of its CEO, Claire Lewis (then Braithwaite). She resigned after six months after the London-based parent, Tech City UK, tried to take more control of the programme and the budget. Claire remains one of the most influential people in Northern Tech, running Baltic Ventures, Liverpool’s only angel investment fund. Tech North, however, was killed just over a year later with no replacement.
An opportunity for a reset
But, as with all things, the regions are not passive recipients of central Government policy, and have done their best to set up their own ecosystems.
Birmingham Tech Week, aping its London equivalent, arrived in 2019 and has grown into a successful and important part of the tech diary. Similarly, the invention of the UK Tech Cluster Group is doing its best to push Whitehall towards regional policy.
But these, and the myriad other important and worthy initiatives set up in spite of Whitehall rather than because of it, have been unable to stem the tide of unequal tech distribution across the country.
However, the new Government has committed itself wholeheartedly to an industrial strategy and to significantly reducing inter-regional economic divides. And, early indications suggest that tech will be one of the major branches of that industrial strategy.
This is a chance for a reset of the relationship between Westminster and our small regional tech ecosystems.
Liverpool, Manchester, and every other combined authority has been tasked with coming up with regional growth plans. There is a real opportunity for these plans to generate meaningful economic growth in their areas and (as long as they avoid redundancy) to massively increase national growth. That is only possible, of course, if Whitehall backs these plans with real autonomy for local political leaders and real capital for investment.
By backing maritech in Liverpool, fintech in Manchester, or deepTech in Bristol, we have a chance to grow our tech ecosystems and grow our regional economies. Westminster, to our detriment, has been too focused on building its one Silicon Roundabout, but we need specialist Silicon Cities across the country to drive both regional and national growth.Find out more about our work on technology
