Forget London, Yorkshire is the UK’s new hotbed of technology companies, investment and growth.
The region’s economy is worth over £80 billion and has grown at five times the average for the rest of Europe during the last five years running. Yorkshire’s Gross Value Added (GVA) figure is expected to grow by 10% up to 2010 and it has attracted more than £340million in research investment.
Research spending in Yorkshire’s three 'White Rose’ Universities ' (Leeds, Sheffield and York), is comparable to Oxford or Cambridge. As well as creating a supply of 52,000 graduates and postgraduates, the Universities also created 14 spin-out companies during 2006-7, all in the technology sector. In Sheffield, the region also boasts one of only two national e-learning centres, proving that skills development is a priority.
Electronics, mobile, games and Information Communications and Technology (ICT) companies are all well represented, with 13,000 organisations employing over 100,000 staff and producing Gross Domestic Product in excess of £17million.
In terms of our creative and digital industries, the area has a head start on other areas of the country because of its digital infrastructure. It was the first region of the UK to achieve 100% broadband coverage and as a result 62% of Yorkshire’s businesses are connected to the internet. One third of the UK’s internet traffic now goes through Leeds.
The Digital Region Project in Yorkshire has already gained national recognition with organisations benefiting from a regional digital network with the ability to connect to fibre optic and Integrated Services Digital Networks (ISDN). This provides unparalleled capacity and international access to voice, video, and data services. This is an attractive proposition both for companies setting up and those that want to relocate.
It’s no secret that Tomb Raider was one of this country’s greatest selling exports and the electronic games industry continues to go from strength to strength in Yorkshire. There are 28 games companies in the region providing jobs for more than 500 people.
Electronics companies generate annual sales of £3.8billion and contribute £1.7billion towards regional Gross Value Added (GVA) while employing almost 25,000 people across the region.
Some 5,789 ICT companies, employing 24,995 people contribute £2billion to Yorkshire’s economy and with Orange & O2 based in the region, its mobile communications credentials are well established.
Investing in innovation
But what of the companies of tomorrow who will contribute to the 10% growth in GVA over the next two years and is Yorkshire riding the crest of the current investment wave in new technology companies?
South Yorkshire appears to be the most attractive part of the region to foreign investors with 40% choosing to invest here. 22 investors were attracted to the area during the last year, creating or safeguarding over 770 jobs, most skilled, highly paid and in the knowledge economy.
As well as international investment in the area, there are numerous ways to access local funding in Yorkshire from Regional Development Grants to local and regional venture capital funds who are pouring money into technology businesses here.
From the West Yorkshire Proof of Concept Fund, which has helped over 20 technology companies with investment from its £550, 000 grant funding, to the Viking Fund, with £5million of angel investors money that has made 25 investments up to £100,000, to South Yorkshire’s Seedcorn Fund, with £4.6 million to invest, local technology funds are flourishing.
As a result, Yorkshire is attracting national venture capital too such as East Hill Management who invested £1.5m in Plasso Technology and IP Group who invested £5.5m in Photopharmica. The institutional investors are also recognising the potential of Yorkshire’s technology companies with Biofusion, Syntopix, Getech, and Proactis raising over £19m on AIM in the last two years.
Yorkshire’s early stage companies winning investment are at the forefront of new technologies with The Alterative Energy Company securing £250,000 from the Yorkshire and Humber Equity Fund, managed by YFM Group, and a business angel, to advance its renewable power generation and conversion equipment.
The products include mid-power wind turbines and a range of power converters which allow mobile devices and electrical equipment to be operated from a car, caravan or boat batteries.
Lattice Voice Technologies, the language tools company, recently raised £150,000 from Yorkshire and Humber Equity Fund after presenting at a Connect Yorkshire investment competition, proving that the investment forums, workshops and investor readiness programmes organised in the region are contributing to the boom.
If Connect Yorkshire’s Investment Forum event hed earlier this summer is anything to go by, the level of interest in Yorkshire’s technology companies is high
Over 60 regional and national investors joined the audience at York racecourse including Noble Fund Managers, Bank of Scotland Growth Equity, Advent Venture Partners, Aquarius Equity Partners, Solon Ventures, 3i plc, Pentech Ventures, NESTA, and Northern Venture Managers. The event saw eight emerging business pitch their propositions with a further 8 taking exhibition space.
The speakers at the event included Dr Steve Garrett, chairman and co-president, EMEA of Salesforce.com, one of the hottest technology companies in the world at present, who emphasised that it no longer matters where you are based to build a successful global company.
With the level of support, investment and access to intellectual capital available in Yorkshire at present, there is no reason why the next world-beating technology company couldn’t come out of Leeds, Sheffield, York or Hull.
Nick Butler is executive director at Connect Yorkshire.
Connect Yorkshire nurtures emerging technology companies and links them with high quality investment resources. The organisation runs its annual Inv£storQuest challenge on 20 September, which offers young technology companies the chance to bid for £1 million of investment funding.