A whopping £100bn. That’s what the digital industry contributes to the UK economy. A thriving industry and a significant driver of UK economic growth, the digital economy is growing faster than the average of 8.1% across the G20 countries and is expected to grow at 11% a year this decade.
All very nice numbers which are putting our country on the world’s stage for digital innovation. So why then was there barely a nod to it in this week’s Summer Budget?
While Chancellor George Osborne focused on Britain moving away from a "low wage, high tax, high welfare economy to a higher wage, lower tax, lower welfare society", as a FinTech company based in Manchester, we were left scratching our heads a little.
In the March Budget IoT, the sharing economy and even driverless cars got a mention, but for digital startups and the tech industry itself, we’re a little disappointed.
As anyone who is part of the tech scene will agree, we truly believe we’re paving the way for the future economic success of Britain for years to come. It’s this digital entrepreneurialism that will form part of Britain’s future economic success and competitive advantage over other countries.
So, while the industry as a whole and the London tech scene was rather neglected in the Budget, so too was the "Northern Powerhouse".
Yes, we saw Osborne make some gestures towards rebalancing the UK economy so it is less reliant on London and the South-East and we absolutely commend this as a great step forward. For us, the £500m housing and skills budget could help with the specialist roles we try to recruit. But now let’s build on the momentum. We’d like to call on the government to really continue this move toward investing in a Northern Powerhouse.
We truly believe in the power of the North, which is why we chose to base our tech startup Hello Soda here. With cheaper rent and living, tech startups have a chance of long-term sustainability by basing themselves here. Sure, there’s no getting away from the fact we travel a lot to London and the US and our travel costs rack up, but it’s not a deterrent and shouldn’t be for anyone else wanting to be based here.
Frequently, we’re asked why we’re not headquartered in London and why we aren’t we going to open an office there and this is something that needs to change. Basing a tech startup in Manchester or the North should not mean you can’t succeed. We’re working with some of the biggest players in financial services and are blazing our own trail, so what does that tell you?
To truly encourage tech growth outside of London the chancellor needs to grab the rebalancing of the economy by the horns.
We'd like to see investment in incubator and accelerator schemes that continue to commit to and boost the northern startup scene.
More funding and grants to Northern tech startups would go a long way to encouraging firms to base here. Not only that, building high growth tech businesses like ours in the North will stem the flow of top graduates to the south and will become self-fulfilling in terms of employment as companies like ours grow around top talent, and quite likely that talent may spin out and create startups themselves.
We’re fully behind the Northern Powerhouse and believe a tech company should be able to thrive if it is not in London. Our message to George Osborne is jump on board and reap the rewards for the UK economy.