Startups working on solutions to reach net zero goals are driving innovation in the South West but the region is being “overlooked” by key investors and the government, a report has found.
The South West of England’s tech sector attracted investment totalling £454m in 2023, nearly a 60% drop on the year prior but still the fourth highest among all English regions, according to a prospectus from support organisation Tech South West.
The South West of England Tech Prospectus aims to highlight the investment opportunities across the region in critical areas such as net zero tech, AI, cyber, advanced manufacturing, and the creative economy.
It found that net zero technology – including marine, agritech, biotech, clean energy, and environmental science – in the region generates £24.1bn turnover, making it a potential hotspot for supporting the government’s climate targets.
Glenn Caplin, CEO of Cornwall LEP, an organisation responsible for setting and driving the economic strategy for the local area, said: “Cornwall is the platform for the UK’s net zero ambitions. From offshore wind to lithium mining, it’s the start of the journey through the peninsula that will drive the UK’s electric car industry to be a European leader.”
Cornwall’s geology harbours substantial lithium reserves, a major domestic source of critical battery material. Experts believe the county’s supply can reduce the UK car industry’s reliance on imports, ensuring a more secure and sustainable supply chain.
The report also found that across the sector, South West startups are 17% more likely to be operating after five years than those based in London.
However, the South West needs greater support to maximise its tech potential, according to the prospectus.
“The South West is too often overlooked by major investors and the UK government,” the report noted. “While other regions take a greater share of cash, it is the South West that
offers an unrivalled opportunity for growth and prosperity.”
Dominic Schreiber of Atilium said: “We need a longer-term strategy to provide stability and security for investment, with a clear government commitment to de-risk that investment.
“The requirements around exporting to the EU after 2030 will make it hard for emerging Chinese and Indian companies to sell electric vehicles into this market. We can’t compete on price, but we can compete on green compliance.”
The prospectus called for key changes including a new government fund that’s 20% larger than the current £200m South West Investment Fund, and more support for young people, especially those from under-resourced backgrounds, into tech careers.
Other recommendations include recognising the South West, and Bristol in particular, as a leading UK hub for deeptech as well as providing a long-term strategy to allow for increased public and private sector investment.
Overall, the South West of England tech sector has grown to some 18,527 companies, with a collective turnover in 2023 of £46.7bn, according to data in the prospectus supplied by Beauhurst.