The South West has traditionally been known for a preponderance of businesses in the agricultural, leisure and tourism sectors. Now, there is a ‘new kid on the block’: the tech company.
Not only is the digital technology sector growing at twice the national average but increasingly these businesses are locating here in the South West. In fact, there are more new businesses per head in the region than anywhere else in the country, other than London. In my experience, many of these companies are within the tech sector. At Thomas Westcott we are advising growing numbers of tech companies, many of which are early-stage businesses.
Why is the South West region so attractive to tech companies?
Tech professionals generally have the freedom of being able to work almost anywhere, as long as they have connectivity. That means that someone setting up a tech business can generally choose where he or she would like to live and work. The South West region is a great place to live and work and offers much to the embryonic tech business; the lifestyle and quality of life factors combined with lower property prices than London and the South East.
What challenges will the tech sector face in the South West?
Tech businesses will face a number of challenges as they scale up in the South West. Managing time is an issue for all growing businesses, but could be a particularly complex challenge for tech companies in the region.
As a business scales up, very often the business owner has less time for non-business activities. If the business owner chose to set up in the South West to combine a career with more time for leisure, then the move away from a ‘lifestyle’ business may impact on the time available for these activities. However, with careful planning and delegation, the business owner can still enjoy the obvious lifestyle benefits that may have been behind the business being established in the South West in the first place.
Again, while access to finance is not an issue that is unique to the South West, tech business owners will find fewer opportunities for angel investment in the South West than some other regions of the UK.
Attracting and retaining the right staff could also be a challenge that is particular to the South West. The labour market for particular skills, including technology, is very tight, as many graduates and young people seek to develop their careers outside the region. As the South West gains a reputation for its burgeoning tech sector, this tide may begin to turn.
A growing tech company is likely to require larger premises but may face difficulties in finding suitable property in the South West. Poor transport infrastructure in a region that is geographically large is another challenge, as are issues with establishing fast and reliable WiFi and 4 or 5G across the whole region.
It is clear that tech scale ups face challenges to develop in the South West. And while we are advising a number of really exciting tech companies, many of which have been supported through growth hubs, the sector is yet to develop that self-sustaining momentum it will need to really establish in the region.
However, I firmly believe that the tech sector will continue to grow and develop and will begin to achieve critical mass that will further drive the growth of the industry.
Patrick Tigwell, Partner