Member Article

How the North can encourage digital sector growth

Tech City UK published an encouraging report earlier in February, outlining the positive impact of the digital tech sector on the UK economy as a whole, with Tech North highlighting the sector’s role in the North.

Across the North of England, a region that stretches from Hull to Liverpool, Sheffield to Newcastle, a total of 283,515 people are employed in the sector. That includes the “41% of digital tech jobs (including support jobs)” outside of those directly employed in the sector. On average digital sector salaries in the North are £45,108.

The digital tech sector, which encompasses everything from SaaS to IT and creative/digital agencies, grew 32% faster than the rest of the UK economy in 2015. These businesses employ 1.56 million nationwide, with a turnover of £161 billion.

Gross Value Added (GVA), calculated after the cost of production, is £87 billion, with £9.9 bn originating in the North. According to the Tech Nation 2016 data, the North’s main strengths are: “E-commerce & Marketplace, Digital Advertising & Marketing, Fintech, Software & App Development, Hardware, Devices & Open Source Hardware.”

All of this makes for encouraging reading. Certainly we can class this as cause to be optimistic for the sector and role the North of England plays in the UK digital economy.

However, the North didn’t get cultivate a thriving sector easily. For digital to continue to thrive more work is needed. Successive governments, on a local and national level, have always had high hopes for the UK’s emerging tech industry. This report is a sign that those hopes are being realised.

Extra Support Needed: Recruitment & Training

No one who works in the digital sector has failed to notice the Northern Powerhouse initiative and Tech North; both potentially could provide the kind of extra support that will encourage further growth in years to come.

One area where more support is needed is working with universities and industry bodies to ensure school leavers and graduates are equipped to work in the industry. Apprenticeships prove useful, certainly better than the industries previous reliance on unpaid interns, which simply isn’t viable in the North and no longer allowed by HMRC.

However, apprentices aren’t ideal for every type of digital business, particularly where founders can’t dedicate the time necessary to train them/support their education. More funding would be needed to encourage SME’s to take graduates, those with the extra experience that growing businesses need.

GlobalHRU organises Unconferences for thousands of HR & recruitment professionals in over forty countries. Andrei Maewski, Co-founder of GlobalHRU knows all too well that talent shortages aren’t unique to the UK tech sector, “But when smaller companies, particularly startups and agencies struggle to find the skills they need, growth can slow, putting businesses at risk, or, at least, making it that much more difficult to hit targets.”

Making the North into a Tech Powerhouse

Right now, however, this support isn’t forthcoming from Tech North, and the Northern Powerhouse has been continually criticised for being all smoke and no fire.

Tech North is trying to refocus itself at present, with it being looked after by Herb Kim, CEO of the Thinking Digital Conference, following the surprise resignation of Claire Braithwaite in January. Only recently, two more of what is only a small team, have also stepped down: “Community engagement and partnerships manager Paul Lancaster and head of skills and talent Coral Grainger.”

Despite these surprise staffing changes, Tech North has got off to a good start. It needs to build on the gains made during the first year. The Northern Powerhouse initiative could make an outsized impact, but only once encouraging words turn into more decisive steps forward.

This was posted in Bdaily's Members' News section by GlobalHRU .