By Michael Cape
If you were to compare the North East of England within the lifetime of many of its more elderly residents with a region in the United States today it would probably be Kentucky or Arkansas. A former thriving coal mining and ship building community it went into a serious decline as its two commercial props began to disintegrate in the second half of the 20th Century.
The post-industrial landscape saw the once proud region which was home to Captain James Cook of HMS Endeavour fame eventually descend into the most deprived area in the UK and that at a time when there was a lot of competition for the title.
However, the North Easterners are a tough breed whose well-honed survival instincts were only sharpened by adversity
Reinventing itself, the North East has returned to its roots in an even earlier period in its history when it enjoyed a formidable reputation for technological innovation. It has taken up the baton from former locals like John Walker who invented the first friction match in 1826, and George Stephenson, the father of railways, who was on the scene at the same time. Then of course there was Joseph Swan who invented the first light bulb in 1879, not Thomas Edison as US history books tell us, who came a year later but did in fact go one better by making the first commercially viable product (see North East’s history of big light bulb moments).
Today the region which boasted the first power station in the world to produce electricity using turbo generators in 1889 has successfully dumped coal and replaced it with code.
Now housing the fastest growing digital tech cluster in the UK – according to economist Professor Douglas McWilliams who once advised former UK Chancellor George Osborne – it seems set to challenge London in terms of the vital investment that made Silicon Valley what it is today.
And the man charged with making sure that the all-important US entrepreneurs see there is more to the UK than London – or any other of the burgeoning tech clusters now to be found in the UK – is Guy Currey, Director of Invest North East England.
“We are still faced with a situation where 65% of inward investment starts and stops in London, while the rest of the UK is competing for what is left,” he says. “And that can be difficult when most Americans have no idea as to where Newcastle or Sunderland are – let alone what the region has to offer.”
But slowly but surely, working with a wide array of partners, Guy Currey has ensured the North East message is reaching the well-established tech community over the pond as witnessed by the US corporates who now have a presence in the North East. IBM and Hewlett Packard, are just a couple of the globally recognized US household names who have seen the advantages of locating in the region which at one time would have shared the same level of interest on their collective radar as Outer Mongolia.
North East cities including Newcastle, Sunderland and Durham, all of which at one time would have been virtually unknown to the US tech sector now find themselves in the frame.
Home grown Sage, the UK’s only FTSE 100 software company arguably led the way by not only establishing itself in the region but maintaining its global headquarters there.
What has played to the North East’s advantage is that London is getting seriously overheated – property prices have gone through the roof thanks to acquisitive Russians and Chinese, the cost of living is crippling for even the largest of wallets, tech talent when it can be found is ever more demanding in terms of remuneration and has no qualms about jumping ship to grab one of the other numerous opportunities available in the sector.
All in all then – though London for the time being is still first point of call for US inward investment – its appeal is on the wane in direct proportion to the increasing appeal of the North East. For here there is an abundance of talent (there are five leading universities in the region) who can appreciate fantastic quality of life at a lower rate of pay thanks to a significantly lower cost of living.
In terms of raw statistics, by 2020, it is estimated that the North East’s IT and digital sector will become a $3.3bn industry.
There are a number of key reasons why US tech firms are choosing to locate there which, in turn, has underpinned its position as the fastest growing cluster outside of London. First is arguably the amount of talent available needed to feed the constant need for innovation challenge.
The five North East universities are some of the best in the UK and provide qualifications and training relevant to the main industry sectors, as well as playing key roles in driving research and development, helping support innovation through knowledge and initiatives, and providing platforms for spin out companies.
Also playing a major role in enhancing the North East’s talent pool of skilled workers are the region’s higher education colleges who work collaboratively with private sector companies to deliver bespoke courses designed to equip students with the skills they need for a career in the IT sector.
The new North East Futures University Technical College (UTC) will specialize in IT for 14-19 year olds. The college will offer innovative ways of learning centred on specialist projects, and has private sector funding from Accenture, HP and Ubisoft.
Also designed to maintain the tech momentum is the new $39.4m National Innovation Centre for Data (NICD) at Newcastle Helix in Newcastle upon Tyne. Its stated objective is to see the next Google or Facebook started in the UK and help the country capitalise on a potential $52.6bn a year boost to the economy.
The most recent addition to the North East tech cluster line-up is Proto, the Emerging Technology Centre, has just opened in Gateshead “We have an awful lot going for us up here and US firms in particular are starting to appreciate it,” says Guy Currey. “Like Silicon Valley, we have a tech cluster which offers the best in working environment, well paid jobs and even surf beaches.
Americans coming here for the first time are blown away. It may not be as warm as California but it is just as rewarding.