• Swindon & Wiltshire Tech
• Tuesday June 18 2024
• Author Name: Peter Davison

South West tech sector worth £46 billion, report shows

The tech sector in the South West has more than 18,500 companies with a combined turnover of over £46 billion, according to a new report.

The first South West of England Tech Prospectus was launched in London last week.

The report, commissioned by Tech South West, reveals for the first time the scale of the blue and green tech economy – that’s the tech concerned with protecting our oceans, and mitigating or reversing the effects of human activity on the environment – across England’s largest region.

Overall, the South West of England tech sector has grown to some 18,527 companies, with a collective turnover in 2023 of £46.7bn, according to data in the prospectus, supplied by Beauhurst.

Just shy of 4,000 of those companies operate in the net zero tech sector, producing turnover of £24.1 billion.

Altilium, Kelpi, Additive.earth, Cleaner Seas Group, LettUs Grow, Oxi-Tech, MolendoTech and ARC Marine were amongst the companies that took to the stage for the showcase element of the launch.

Between them, they are operating globally across marine tech, agritech and climate tech, and have already raised tens of millions of pounds of investment from UK and overseas investors, and Government funding.

The prospectus was developed in partnership with Future Space Bristol, Microsoft, Neighbourly and Barclays Eagle Labs, and includes key data from Beauhurst and other national and regional sources.

The launch was at Howden UK’s global headquarters in the City of London, before Tech South West hosted investors and founders at a private dinner in the world-famous Gherkin building.

Dan Pritchard, founder of Tech South West, said: “The cutting edge of net zero technology is emerging fast across the South West peninsula, because of the talent that is attracted and embedded across the region.

“We have powerhouse universities, specialist tech hubs, plus UK and global environmental organisations, along with world-class research centres in the region. And the growth is incredibly impressive, the opportunity immense, and the work vital if we are to tackle some of the world’s most pressing issues.”

The prospectus highlights the limited funding from the Government into the region, with the first ‘Nations and Regions’ growth funding allocated to the region going live in 2023, years after the first Northern Powerhouse and Midlands Engine funds, and just a fraction of the amounts pumped into those funds and their recently launched successor funds.

Dan added: “To a packed audience we set out the case for this golden opportunity to back the net zero tech generation.

“London gets over 80 per cent of venture capital investment into UK tech, and yet South West tech firms have a better success rate – they are 17 per cent more likely to be operating after five years than if they were based in London.

“Imagine what we could do together with just a fraction of that London investment redirected to the South West.”

Three key areas detailed in the prospectus are:

• Net zero tech including climate tech, clean energy, EV battery development, agritech, marine and biotech
• Future economy, including deep tech, cyber, AI, quantum technologies and life sciences
• Creative Industries including immersive tech, digital media, gaming.

Sarah Fasey, social value lead at Microsoft, said: “New technologies, including generative AI, hold promise for new innovations that can help address the climate crisis. The focus on blue and green economies at the heart of the South West economic plan is something Microsoft naturally wants to support and encourage.”

The prospectus sets out opportunities for investment and collaboration, and also calls for key changes in how the UK regions’ tech sectors can be supported and helped to achieve their full potential.

Those recommendations include a new Government fund to start to level the playing field, 20 per cent larger than the current £200m South West Investment Fund, alongside an investment focus on blue and green innovation – renewable energy, sustainable mining and battery technology – and recognising the region as a national centre of excellence.

Several of the recommendations appear to align with proposals set out in last week’s Labour Party Manifesto, including pension reform, increase the support the British Business Bank gives to regions and a new £7.3 billion National Wealth Fund.

Ben Cooper, Tech South West director and funding and finance lead, said: “To achieve the UK’s Net Zero targets, be a true international leader and transition to a fully digitally-enabled and skilled society, the next Government must provide long-term certainty for the regions with clear strategies that give confidence to public and private investors, including early and pre-market engagement to signal the direction of travel and future technologies.

“We need to enhance access to capital for the full growth journey, promote tax incentives and co-investment schemes, and ensure the Government’s policy of promoting private investment into innovative, hi-tech businesses, is aligned with the regulatory treatment of that investment into early stage seed funds and direct Angel investing.

“We need to continue to re-focus away from property and pension investment, towards early stage tech investment.”

UK Bankers for Net Zero, Clean Growth Fund, Circularity, Exeter Science Park, Beauhurst, were amongst contributors to the showcase, held at Howden UK, in Creechurch Place, London.

Those involved included Green Angel Ventures, Hambro Parks Venture, Impact X Capital, British Design Fund, EDF Energy, Maven Capital, Magenta Partners, Moscar Capital, Pilot Round, Bristol and Bath Regional Capital, ScaleUp Global, SuperSeed Ventures, Turquoise International, White Horse Capital and True Global.

Professor Matt Freeman, centre director at Future Space Bristol, coordinated the research on the prospectus.

He said: “What the South West’s tech sector has achieved with comparatively little government investment is truly astounding. Having a prospectus that clearly shows the strength and power of what the region is capable of is important for so many reasons.”

Image: Gareth Williams Photography

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