Newcastle technology investment
Friday, September 26, 2014
Newcastle’s reputation as a national tech centre, second only to Silicon Roundabout in London, is something to be proud of. But rather than patting ourselves on the back, supping brown ale and doffing our caps to the capital, we continue to strive for excellence. Many of us are not content with second place. We believe that Newcastle has an opportunity to grasp the Holy Grail of technology and become the leading UK centre for the industry, deferring to none.
Of course, the North East has a long history of innovation; famously the first light bulb and the earliest train were developed here. But after the coal and ship building industries dwindled and died, there was a vacuum which was difficult to fill. Steadily, over recent years, the region has regenerated. And thankfully, it is not just our reputation for hosting good stag parties that has brought about this seismic change.
When Lord Adonis reported on the region in 2013, he cited the fact that there are 25,000 workers in the tech industry and that Newcastle, with a population of less than 300,000, has the second highest rate of start up businesses outside London. There are now 1,400 software companies based in the region.
At one end of the scale is accountancy software giant Sage, with its £1.4 billion revenue and FTSE 100 status. And HMRC is establishing a Digital Data Centre in Newcastle, from which they will overhaul the Revenue and Customs website. At the other end are the niche software businesses like Pillow Talk, which connects long distance lovers via wristband and smart phone app so they can hear each other’s heart beat. Or Recite Me, which re-packages content online so that it can be read aloud.
Much of this success is due to the helpful support network that is available. For a start, Newcastle has received a £9 million investment in superfast fibre-optic broadband which deliver speeds of up to 80 Mbps to 97 per cent of the city. The first £1 million accelerator programme Ignite100 is also based here, preparing businesses for investment and growth. And Newcastle boasts its Science City Initiative and Gateshead the Thinking Digital Conference. It is fair to say that the region is geared up for growth.
Once companies are established here successfully, the key will be to retain them. And this is where the North East has the edge over its London rival. The Office of National Statistics says that families on Tyneside spend 40 per cent less on living costs so salaries go further; house prices are lower and office space cheaper. A pint of beer costs less too.
Perhaps this explains why four out of five North East IT and telecoms graduates stay in the area after they graduate. Others can spot the signs too. Of Ignite’s latest funding round, a cool £700,000 worth of investments were secured for digital technology businesses. For Newcastle technology investment, four out of five investors were from outside the North East. The rumour is that Newcastle start ups have now got international appeal.
There is every reason to believe that the tech sector will continue to grow in this area and that one day Newcastle will be the leading UK centre for technology. As a specialist technology communications specialist agency, working closely with many successful businesses, some of which are raising their profiles to secure angel investment, many of which are based in the North East, we are pretty damned excited about this.