A new report into the UK’s business clusters has highlighted tech’s role in the British economy.
The report identified the 31 most economically significant clusters in the UK. Cumulatively, they contain 8% of the UK’s businesses, but generate 20% of UK output.
Commissioned by Lord Sainsbury, former Minister for Science and Innovation, Industrial revolutions: capturing the growth potential drew on research conducted by management consultancy firm McKinsey & Company.
Tech leads the way
Tech clusters made up 4 of the 31 across the country, more than any other industry, and included ‘Digital London’, the capital’s thriving tech scene.
The tech highlighted wasn’t solely in London though. Silicon Glen (Scotland) as well as tech in the South West and South East were also profiled.
It found that of the 31 clusters only London’s financial services generated more to the UK economy than London’s tech ecosystem.
This corroborated recent findings that tech could soon overtake financial services as a bigger driver for GDP.
Problems with cluster growth
The report revealed that whilst many clusters are flourishing there are a number of barriers to growth for some.
It found:
- The brand identity of key clusters is weak, impacting investment, talent, and demand
- Cluster networks are failing to connect people within and outside the cluster systematically
- Clusters are not fulfilling their potential to foster innovation
- Education and skills systems are not producing the concentration of specialist skills that clusters need
- Every cluster has specific infrastructure challenges holding back growth
It suggested a number of solutions for each barrier, including promoting the top clusters domestically and globally in a similar fashion to Tech City UK.
South West Tech
The growing tech cluster in the Bristol and Bath region was explored in depth as one of the case studies for the report.
Tech City News highlighted the South West cluster as a potential candidate for the UK’s ‘next Tech City’ in February.
It is home to the SETsquared incubator which has been ranked by the University Business Incubator Index as joint best in Europe.
David Maher Roberts, creative and digital sector specialist at Invest Bristol & Bath, said:
The fact that the Bristol and Bath region is recognised as one of the 31 most economically-significant clusters in the UK is obviously good news, but the real headline for us is confirmation that we are the only globally-significant, fast-growing high tech cluster outside of London.
The Bristol and Bath region differentiates itself from London because of its high tech and engineering heritage.
The culture is not only breeding startups but also attracting companies from outside of the region to set up innovation and tech centres.