The latest in our series of online events for the digital tech sector, Tech Nation Talks South East saw lots of ground covered – in terms of both topics and geography.
The South East is divided into nine regions with seven chartered cities, 17 universities and no fewer than 74 local authorities. There was no shortage of talking points over the hour-long panel session, which was hosted by Elizabeth Corse, our Entrepreneur Engagement Manager for the region.
It began with an overview of the South East’s digital tech performance, taken from Tech Nation Report 2020. Digital tech turnover in the region was just shy of £32bn, taken by 38,530 digital tech businesses that collectively employ 215,000 people. The South East attracted £300m of VC investment in 2019 and, between 2015 and 2019, £448m was invested into emerging tech; of that, £281m went into AI.
Before we explore what our tech experts on the panel had to say, we would like to thank our partners Openreach and Barclays for supporting our Tech Nation Talks events. Both are pivotal in supporting digital businesses through the provision of valuable infrastructure, and in championing the UK tech sector.
Strength in variation
Before talk turned to Covid-19, our panellists gave their opinions on what they perceive to be the region’s biggest advantage for digital tech founders. Head of BGF’s Talent Network Cate Poulson praised the region for its strong (and eclectic) mix of regional identities – ranging from Reading’s ability to attract talented developers (and potential future entrepreneurs) through its multinationals – to the strength of Milton Keynes’ corporate finance community.
Sam Harper, VP of Growth & Business Operations at Upscale 4.0 alumnus Open Cosmos, spoke of his collaboration with the Harwell Space Cluster in Oxford, which provided incubation space and then larger premises for his satellite-based solutions company to grow. Most of the company’s workforce now lives in the area, with around half originating from overseas, which together lend it a hybrid local-international culture.
While Oxford provides the company with no shortage of “good” candidates, it’s harder to find “world-class” ones locally, Sam said, adding that the UK “still has a long way to go” to match the level of talent available in the US.
That said, the panel was in unison that it would not swap London’s developed talent base for the advantages that come with being in the South East – including quality of life and local connections.
Lindsay Fisher, cofounder of Rising Stars 2.0 winner Sparkbox, said that being based in Southampton’s Barclays Eagle Lab helped raise her retail tech business’s profile as an employer in the area. “It’s easy to become lost in a sea of startups in London,” she said. “Being based outside of it allowed us to take advantage of having that little bit more local and dedicated support.”
Mat Hunter, CEO and cofounder at the Plus X Space innovation hub, said that being in close proximity to London provides companies in the South East with a “great opportunity to take advantage of the capital’s energy, talent and connectivity.”
When the topic turned to the pandemic, Mat said that larger companies in the South East are likely to reconsider their office space requirements post-crisis, with the view to closing satellite offices in favour of more flexible remote working.
“In addition to ecosystems focusing on startups and scaleups, it’s about making sure that more mature companies can become more digitised and agile,” he said. “What we find is that bigger businesses want the culture of the younger ones – and they have to learn now more than ever.”
Mat, whose own innovation hub has reopened after closing down for a couple of weeks, expressed admiration for companies who have pivoted during the pandemic. “It’s the earliest stage businesses – almost the incubated ones that we support – that have suffered the most because they’re often taking on consultancy work on the side in order to pay the bills,” he added. “In effect, that’s their runway.”
In coordinating international satellite projects of a different kind, Open Cosmos is sometimes integrating customers’ tech into space-bound satellites before shipping them – and it’s here where Covid-19 is making itself a nuisance. “We have experienced disruption to international shipping and logistics that will create uncertainty in our business,” Sam said. “We’re taking steps now to make sure that uncertainty doesn’t translate into project delays.”
On the other hand, Lindsay said that the impact hasn’t been immediate for Sparkbox, which could benefit retailers – particularly those rapidly adopting tech in “less glossy” areas such as merchandise planning to remain ahead of the curve. Despite the uncertainty caused by the pandemic, Sparkbox raised SEIS investment from VC AI Seed in March.
In exploring various financial business support offerings from the UK Government, Lindsay expressed disappointment in not qualifying for the Future Fund on account of not having raised £250k of investment. “Fortunately, we’ve always built our model around having a steady stream of revenue,” she said, but she is concerned the pandemic might affect future fundraising plans.
The tech founder, who would like to see the Government consider funding trials for startups who have commercial potential, said that Sparkbox will be taking advantage of the coronavirus Bounce Back Loan scheme and will apply for support to continue funding R&D from Innovate UK.
A call for hope
When asked what single change they would like to see in their cluster, Sam called for a return of confidence and optimism about the future post-pandemic. “It’s so central for investment activity and for businesses to feel comfortable about growing and pushing on,” he said. “As soon as that starts to return, in earnest, I think that’s when the recovery will be.”
“I’m really hoping that over the next year we’ll start to see more corporate partnerships and more involvement of corporates in local ecosystems, especially outside of London,” said Lindsay.
Following that, Cate urged hiring founders to double-down on outputs, looking at what’s being delivered in their business and bringing an end to the idea that the number of hours you put into a working day (or the location of your business) is what determines success. “Focusing on the result that we’re looking for will be very freeing in terms of employee engagement and culture, in addition to hiring processes and opening up a wider talent pool,” she said.
Many challenges lie ahead for the South East, which is a region comfortable in its own skin. Some of its digital tech companies will encounter challenges related to rapid scaling, while conversely, its more established businesses will look to modernise their culture to be more in line with their younger counterparts post-crisis. It all makes for an interesting and varied ecosystem, one that recognises its close proximity to London as a plus, rather than a negative.
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