A landmark report into the technology industry in the South West has revealed the vast opportunities for tech businesses and entrepreneurs across the region.
The South West of England’s tech sector is set to grow to almost £20bn gross value added (GVA) a year by 2026, creating more than 125,000 new jobs, according to a new study from Whitecap Consulting.
The research, by far the most detailed and granular of its kind into the strengths and weaknesses of the region's tech ecosystem, was commissioned by Tech South West and acts as a launchpad for the industry to highlight its achievements -- actual and potential -- on the national and international scenes.
The report reveals that the South West is rapidly becoming a global leader in environmental tech, with internationally recognised tech firms, centres of excellence, science parks, university research, and innovation hubs in specialisms including environmental science, marinetech, climate science and cleantech, along with fintech, deep tech and robotics.
The South West has the fifth largest tech sector of the 12 major regions in the UK, worth £11bn GVA annually, and is now generating around one in 11 (7.9%) of all new tech startups in the country.
With nearly 170,000 people working in the sector, the GVA per capita of £1,943 is the second highest in the UK when compared to all other regions outside London and the South East, the study reveals.
The research found that if growth rates continue in line with the past five years, even factoring in the economic disruption caused by the pandemic, the South West’s tech sector will be worth £19.2bn by 2026. Tech job creation in the region is forecast at 75%, rising from 168,169 in 2021 to 294,380 by 2026, an additional 126,212.
Dan Pritchard, co-founder of Tech South West, said: “The South West of England’s tech sector is on an upward curve. Not only is this fantastic for the economy and jobs, it’s evidence of the role the region plays globally in tackling climate change.
"With international tech specialisms including climate and environmental science, marine tech, cleantech and agritech, the South West is fast becoming the UK’s natural green powerhouse of tech. It is substantial growth and a huge number of vacancies, which will require a combination of improved productivity and efficiencies, talent, and automation to help us get there.”
There are challenges, particularly around talent. The region has 14 universities and nearly 170,000 students, including 19,500 tech and engineering students (11% of all students, compared to 7% UK average), but has a high vacancy rate across the tech sector, with recruitment difficulties and salary inflation. Whilst still low, the report does reveal that the sector has double the proportion of black and minority ethnic employees (8.8%) compared to the region’s overall ethnic minority population.
Chris Evans, director of Innovation, Impact and Business at the University of Exeter, said: “This research is perfectly timed and emphasises that as a region we have an opportunity to achieve something really significant. We must work together to target resources such as Levelling Up and the Shared Prosperity Fund to make sure our innovative R&D can help drive the sectors with a real competitive advantage.”
Toby Parkins, chair of Tech South West and co-founder of Cornwall-based software firm Headforwards, said: “The tech sector is creating growth at rates exceeding all other sectors. This report clearly demonstrates that the whole tech sector needs to be embraced to create significant economic growth.
“Now we need local and national Government to step up and collaborate, developing more effective policies and creating the high growth conditions for businesses.”
The South West Tech Analysis Report 2022 can be downloaded at https://www.techsouthwest.co.uk/regional-report-2022