‘Devolved Tech is a big opportunity for UK Industrial Strategy’

Mark Underwood highlights that while tech growth is focused in London, regions like Leicestershire have untapped potential for broader economic growth.

The newly-published Industrial Strategy Green Paper presents the opportunity of digital and technology for the UK.

And it also presents the opportunity of devolution as a means of driving growth across underperforming regions.

But how will it succeed in bringing the two together? How will the full Industrial Strategy (due for publication Spring 2025) support digital industries outside of London and the South East?

The Green Paper rightly identifies Digital and Technologies as one of eight key growth-driving sectors for the UK economy over the next decade.

It notes that the UK is only the third country globally (after the US and China) to build a tech ecosystem valued at over $1 trillion. This is clearly an asset to be nurtured.

However, dig a little deeper and it’s clear that success remains heavily concentrated in London and the South East.

The paper acknowledges that “other city regions have historically underperformed relative to both the national economy and their international counterparts.”

Now, as someone running a fast-growing tech business in the East Midlands, I know first-hand that there is enormous untapped potential in the UK’s regional tech scenes.

The report cites cities including Manchester, Birmingham, Leeds and Glasgow are developing digital clusters.

But smaller cities and towns across the country are nurturing innovative tech startups and scaleups – including Digital Planning right here in Leicestershire.

Devolving UK technology growth

The Green Paper makes some positive noises about unlocking regional potential by:

  • Concentrating efforts on “places with the greatest potential for our growth sectors: city regions, high-potential clusters, and strategic industrial sites.”
  • Working with Mayoral Combined Authorities on 10-year Local Growth Plans (not sure what this means for non-MCA areas such as Leicestershire).
  • Harnessing R&D investment “to build strong regional innovation ecosystems.”

These are welcome sentiments. But will they go far enough in recognising and empowering regional tech ecosystems specifically?

There’s a great opportunity if it does. Strengths of regional tech hubs include lower operating costs, strong links to local universities, and often a more loyal talent pool less prone to job-hopping.

Many local areas are also developing distinct specialisms in areas like healthtech, edtech, cybersecurity and AI/machine learning.

In our case, for example, Digital Planning is getting increasingly involved with regional networks and KTP opportunities through the likes of De Montfort University’s Innovation Centre, Barclays Eagle Labs, and the East Midlands Chamber.

Meanwhile, we’re now working with the Business Services team at Derby University towards supporting a PhD and an industrial fellowship with its technology professors.

Potential support for UK regional tech

When compared to London, though, challenges persist around access to investment, recruiting talent, and lack of critical mass. The Industrial Strategy will hopefully directly address these issues.

Some ideas that might be explored further are:

  • Targeted tax incentives for tech investment in specific regional clusters
  • Funding for specialist digital skills programmes tied to local industry needs
  • Increased support for regional tech accelerators and incubators
  • Improved transport links between regional tech hubs to support clustering
  • More large tech firms to open significant regional offices – such as IBM’s decision to open a base in Leicester.

The Green Paper’s commitment to “easing the investor journey” and “crowding in investment” are positive. But, again, there needs to be a specific focus on funnelling more of this investment to high-potential regional tech businesses. They are often overlooked.

For the UK to truly compete in global tech it must activate the immense latent potential in our regional tech ecosystems. Everyone seems to agree on that.

An Industrial Strategy that fully embraces “devolved tech” could be transformative – not just for the sector, but also for delivering on the Levelling Up agenda (or whatever it is now named).

Digital Planning is very proud to be a Leicestershire business – as demonstrated by being shortlisted for Innovation and Outstanding Growth categories of the Leicestershire Business Awards.

The foundations are there in this Green Paper. But bold, targeted action will be needed to truly unleash regional tech. Hopefully we will be seeing it in this Industrial Strategy come Spring.

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