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November 2023
The intersection of so much expertise “is a powerful mix” for fostering innovation, says Nick Sturge, techSpark chair, referencing projects like the robotic penguin used in BBC nature documentaries with Bristol-based contributors across software, robotics, behaviour science, and media.
The numerous active subsectors also attract corporates to the region, adds Brook, since they can access and engage in opportunities across multiple verticals, making it worth setting up a regional base.
Nonetheless, these features of Bristol and Bath’s tech ecosystem can present barriers to growth too. Karin Rudolph, founder of AI ethics consultancy Collective Intelligence who also runs the Tech Ethics Bristol network, notes that the range of support and networks available can be difficult to navigate for anyone new to the region or the tech community.
The focus on collaboration and authenticity can undermine the region’s growth ambitions since it often means rejecting the idea that only a few tech companies can be ‘winners’, which contrasts with the focus placed on the growth journey from scaleup to unicorn – achieved by only around 2% of seed-stage startups globally.
Sturge believes that the culture of authenticity has led to less risk-taking and a reluctance to proactively promote and advocate for the success of the region’s tech sector and specific businesses. It has created an unusual situation in which the region has a lower rate of startup creation than other places, but a higher rate of startup survival. According to the West of England Combined Authority, 42% of startups founded in the last five years have survived, a rate second only to Northern Ireland.
"There's a conscience in the city and there's a positive attitude of getting on with it and doing the right thing,” he explains. “We have a healthy cynicism in the city which can challenge people but if you get over that, then you thrive. People tend to only set up businesses if they're decent businesses, and people want to do it right.”
Infrastructure and support
Our survey of 100 senior tech leaders based in Bristol and Bath showed that in general, Bristol and Bath are seen as having sufficient resources and infrastructure for its tech sector.
In particular, the cities were rated well for digital infrastructure, diversity and inclusion and available talent, with these having the lowest proportions saying these needed improvements.
On the other hand, for both funding and affordable office space, more people said they needed improvement than said these were excellent.
While the Bristol region received the most Innovate UK grant funding in 2022 compared to other regions, stakeholders say early-stage equity investment is more limited, particularly highlighting a shortage of angel and pre-seed funding in the region to support startups and university spinouts before they are ready to approach larger venture capital investors.
“The most common barrier to tech growth we hear about in the region is access to funding, with many growing businesses needing to seek investment from further afield, often involving London-based investors and the additional travel time and expense associated with that.
“This is possibly linked to the region’s culture, since we’re not as good at shouting about our achievements as we should be, which allows attention to be drawn elsewhere. If we can amplify the latter in a joined-up way, it can only help increase the focus on the region as far as access to investment and grant funding is concerned.”
Alastair Mitton
Partner at Womble Bond Dickinson
“The most common barrier to tech growth we hear about in the region is access to funding, with many growing businesses needing to seek investment from further afield, often involving London-based investors and the additional travel time and expense associated with that.
“This is possibly linked to the region’s culture, since we’re not as good at shouting about our achievements as we should be, which allows attention to be drawn elsewhere. If we can amplify the latter in a joined-up way, it can only help increase the focus on the region as far as access to investment and grant funding is concerned.”
Alastair Mitton
Partner at Womble Bond Dickinson
Business challenges
Matt Brook
Relationship Director, SME Business and Commercial Banking at Lloyds Bank Bristol and Bath
“Given the specialist nature of the technology firms in the region, having access to highly skilled employees is vital to reaching full potential. This remains an ongoing challenge despite huge success in attracting the right talent into the area.
“There are also challenges presented by the rising launch costs, driven by expensive office and lab space. Technology incubators such as Science Creates’ Unit DX and DY, and the University of the West of England FutureSpace are now playing a role in addressing this particular challenge by providing specialist space and programmes for technology businesses at a sustainable cost.
“Finally, with a lower level of equity funding into the region than in areas such as London, the work of regional organisations and incubators to spotlight investment opportunities is vital. Access to banking services is also an issue for businesses in Bristol & Bath, having a relationship-based banking partner with teams who live and work in the community is vital to ensure a founder’s focus can remain on their business.”
Matt Brook
Relationship Director, SME Business and Commercial Banking at Lloyds Bank Bristol and Bath
Opportunities for growth
Regional subsector strengths
The survey of tech leaders demonstrates the range of subsector strengths in Bristol and Bath, with cybersecurity and fintech coming out top.
Climate tech and deeptech are seen as holding the most opportunity for growth, ranking highly as current strengths in the region but receiving an even higher proportion of votes for future subsector strengths. Similarly, quantum computing and VR/AR also stand out as areas in which people expect future development.
Regional subsector strengths
The survey of tech leaders demonstrates the range of subsector strengths in Bristol and Bath, with cybersecurity and fintech coming out top.
Climate tech and deeptech are seen as holding the most opportunity for growth, ranking highly as current strengths in the region but receiving an even higher proportion of votes for future subsector strengths. Similarly, quantum computing and VR/AR also stand out as areas in which people expect future development.
Tech decision maker view
I would recommend Bristol / Bath to someone considering where to locate a new tech business
I feel that being based in Bristol / Bath puts my tech business at a disadvantage
I have experienced specific advantages as a result of basing my business in Bristol / Bath
It has become more attractive to start a tech business in Bristol / Bath over the last five years
Bristol's and/or Bath's technology sector will grow rapidly in the next five years
Bristol's and/or Bath's tech ecosystems get the international recognition they deserve
The local government does enough to support tech businesses in Bristol / Bath
There is sufficient support from central UK government for Bristol's/ Bath's tech businesses
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