Sowing the seeds of growth in the North East tech sector

Last week saw the launch of the London Tech Week and UK Tech Cluster Group’s 12 Clusters of Tech series. Running monthly for the next year the reports each shine a light on a different region and showcase some of the UK’s most exciting and innovative tech businesses – and brilliantly, the series opened with a look at the North East and Tees Valley.

The need to enable, support and facilitate tech businesses is a central priority of the North East digital strategy. We have a vibrant digital ecosystem in the region with multiple networks engaged in promoting it. It’s absolutely critical that we nurture the types of businesses that the report celebrates. How do we ensure that next year’s report features as many, or more, success stories? Who are our emerging companies that might be next in line for high growth? Do we have the right conditions in place to increase the birth and survival rate of tech startups?

These are all important questions because tech startups – early stage, innovation-led businesses with high growth potential that are creating proprietary technologies – have distinct needs that are different to the more generic support required by established scaling businesses. They are creating new products, services and solutions; sometimes solving problems we don’t even know we have yet. And with that they have the potential to create new supply chains, new workforces, open up new markets, give the region distinct competitive advantage and play a major role in our economic and cultural identity.

And this is where as a region we have some challenges and some opportunities. In order to see those high growth businesses born and flourish we need a pipeline of pre-seed companies developing their MVPs, their IP and their investment rounds. As a region we don’t perform as well as others in feeding that pipeline – this is reflected in our national profile with private investors and the number of new tech startups thriving in the North East. Whilst we are home to some fantastic tech businesses, as shown in the report, there is more to be done to improve the trajectory.

This is why the North East Local Enterprise Partnership (LEP), via the digital strategy, is working with founders to explore what those distinct needs are; to better understand how we can boost the sustainability of emerging startups and to establish exactly what needs to be in place to improve the picture. By asking the tech startup community what it needs, we can better facilitate and champion the right support and see an uplift in early stage tech business creation and survival. We are working with founders to create a blueprint for regional tech startup support which we will be announcing more about in the coming weeks and months.

So what’s needed? One of the privileges of my role is that I get to speak with so many inspiring tech entrepreneurs on a day to day basis. Some key observations that should inform future plans:

• Know when to ask and when to tell: getting a tech startup off the ground is really hard work. It takes guts, determination and a healthy dash of madness. It would be easy for those of us in the wider business community to assume what the needs of founders are, but that’s only going to go so far. Equally, founders can be so enveloped in building their businesses they might forget to look up occasionally. The North East tech ecosystem needs to be shaped by entrepreneurs, for entrepreneurs.
• Take the longview: early stage startups often navigate a precarious and unpredictable path to get off the ground. By definition they find the sweet spot between product development and market fit through iterating, experimenting, and even failing first. As tempting as it can be to shout every early success from the rafters, those companies need space and time to come to fruition. If we want to see a tranche of tech businesses born in the region over the next decade we need to plant seeds now and be ready for the long haul – if that means watching and waiting, it will be worth it.
• Be purpose led, outcome focused: related to the above, it’s easy to lose the USP of an early idea in the mix of all things “digital” (which these days, is really just “all things”). But losing that nuance means we compromise on uniqueness. Prioritising resource onto purpose and outcome, rather than immediately tangible quick wins might go a long way.
• Context is everything: building tech clusters is complex. To be clear, this isn’t the same as building an individual tech startup. Cluster development requires multiple factors and actors to work together as part of an overall ecosystem and each regional cluster is specific to its economy, culture, assets, identify and profile. A healthy and sustainable tech cluster is geographical, not sectoral.

As we collectively navigate the challenges of the current climate, the North East will need to be as innovative, resourceful and resilient as ever. We will need to be creative and daring to build the economy of tomorrow and to do that we can learn a lot from the tech start up community. To further bolster our status as one of 12 clusters of tech let’s continue to demonstrate that we value our tech businesses and work collaboratively to ensure they feature in future reports and more.

Laura Partridge, Digital Programme Lead, North East LEP

Find more information about London Tech Week and UK Tech Cluster Group’s 12 Clusters of Tech series, and download the North East report here.

If you want to know more about the North East digital strategy and supporting the region’s tech startups contact Laura Partridge on [email protected].