A lack of interest among the West of England’s politicians in its tech sector, despite its strength, is holding it back compared to other regions, according to a major new report.
At the same time, the government’s ‘levelling-up’ agenda is steering funding towards parts of the country with strong and supportive political leadership.
As a result, Bristol and Bath’s tech sector risks being “drowned out” in the debate at a time when it is also facing up to other challenges – not least the often-cited “humility” of many in the ecosystem – the inaugural State of Play report for the West of England warns.
The report, published by techSPARK, the region’s largest tech network, also looks at key issues for the sector, such as the risk of an ‘entrepreneur drain’ as people move away and the higher cost of living in Bristol and Bath compared to Midlands and Northern cities deterring tech workers from moving here.
It also benchmarks the West of England’s tech sector against competing regions, such the North West, centred on Manchester, and the Midlands, with Birmingham at its heart, and weighs up the strengths and weaknesses of the ecosystem in Bristol and Bath.
The report celebrates recent achievements of businesses and individuals in the cluster, which now has more than 1,200 businesses spanning fintech, greentech, digital, cyber and deeptech among others.
But it also delves into how the cluster could be improved, as both Bristol and Bath are beginning to feel the growing pains of ecosystem maturity. 
As well as highlighting policymaking and political leadership – or the lack of – and the diversity and depth of investment and venture capital funding, it looks at the need to build on the region’s strong collaborative culture.
Other issues include cementing the cluster’s identity and bridging the gaps between competition and collaboration as some of the key areas to assess.
According to techSPARK chair and the report’s main author Nick Sturge MBE, pictured – a long-time champion of the sector in the region – while identity is one of the major strengths of the two cities, it is also the source of its greatest potential weakness.
“Bristol and Bath are passionate cities, with purpose at their hearts,” he said. “But the often-cited humility of those within the tech space may in fact be hampering growth.
“The level of humbleness within the space seems to be at odds with global brand-building and big acquisition routes. What do we want to be known for?”
Positioning the cluster politically to ensure supportive policies was also a key issue – with a perceived lack of political leadership and political interest one of the most widely raised topics during the consultation and creation of the report.
Nick Sturge added: “During the consultation for this report, the lack of political interest in the sector and poor leadership frequently emerged.
“The consensus is that political leaders don’t fully comprehend or champion the sector in a way that leaders in other clusters, such as the Midlands and Manchester, do.
“It was noted, by those we consulted, how the West of England Combined Authority (WECA) has grown in size in recent years making it appear harder to influence strategy and priorities.
“This leaves a sense that public and private sectors aren’t pulling in the same direction nor championing the sector on the national stage.”
He said techSPARK had engaged with WECA officers for the report, which gave an opportunity to “push for ambitious and innovative new approaches.”
The report also shows Bristol and Bath tech firms received strong equity investment last year – with a total of £975m raised – however, less is less venture funding this year, particularly at pre-seed and early-stage levels.
Another area of concern was that while Bristol was cited as the strongest cluster in the UK outside London for the availability of growth capital, and in 2021 European venture capital firm Atomico ranked it third behind London, Birmingham and Manchester, the city had dropped out of the rankings last year.
This picture was compounded by the recent success of other UK regions in receiving government funding via innovation accelerators and investment zones.
The funding itself has been distributed in line with the levelling-up agenda, but while this will de-risk and unlock additional private and public sector funding, it could see Bristol and Bath struggle to keep pace over the next five years.
Among the region’s strengths highlighted by the report were its research institutes, which had led to a growth in the number of spin-outs when compared nationally, with all four local universities offering great strengths and benefits to the sector.
The report also highly praises the human capital within the cluster. A highly skilled workforce with strong mentorship and governance were key strengths of the sector, it said, with a “positive and forward-thinking incubator mentality” also greatly contributing towards its overall health.
However, concerns were raised over the risk of ‘entrepreneur drain’, leading to a limited community of more experienced entrepreneurs and a reduced appetite for individuals taking on ‘higher risk’ jobs.
Cost of living concerns also loomed large, with Bristol now being named as the most expensive major city to live in outside London. As the city became less affordable to live in, it could limit the local talent pool, diversity and social mobility.
techSPARK’s State of Play report was prepared by Bath-based Rocketmakers special projects lead Briony Phillips and techSPARK managing director Ben Shorrock, alongside key partners WECA, inward investment agency Invest Bristol Bath, HR group Cintra Global and Bristol-headquartered national law firm Burges Salmon.
Other supporters Hargreaves Lansdown, MAINstream, Firehaus and Morton Property Consultants.
To read the full report, click here
