Think tech clusters and first thoughts undoubtedly go to places like Shoreditch, Cambridge and perhaps Manchester.
However, growth in this sector isn’t the exclusive domain of big cities with large student populations and hipster-friendly, urban lifestyles on offer.
There are a number of towns and small cities that are punching above their weight, offering a different sort of “hipster” lifestyle.
Dr George Windsor, senior insights manager, Tech City UK, says there are many ingredients that go into making a cluster, from the obvious such as availability of skills to the relationship between local universities and businesses, affordability, lifestyle and culture. But he adds: “Having a thriving culture doesn’t necessarily mean café culture.”
When it comes to growth and having the right credentials, three locations leap out from the shadows of the big cities, so what is the secret of their success in attracting and fostering businesses from the growing tech sector?
Case study: Rural attractions in Truro and Redruth
Rural Cornwall might be more known for pasties, cream teas and surfing but according to the latest Tech Nation report, Truro and Redruth had the third-highest growth in digital jobs in the UK between 2011-2015.
It may have been starting from a low base and it is unlikely a big corporate is going to head to that far south-west of the country, but the University of Falmouth is helping provide the talent for start-ups and SMEs. Coupled with a country lifestyle – and being relatively affordable – you can understand the draw.
The university takes a practical approach to its curriculum so that its students leave with skills and knowledge applicable to what industries need and business costs are low.
Headline rents in Truro are just £13.50 per sq ft, which makes speculatively development an impossibility unless it is part of a mixed-use scheme with a large residential element.
Tom Duncan of local agent Alder King says on paper there doesn’t appear to be much to encourage commercial development.
“If you were to look at our current enquiry statistics there isn’t a massive amount of known demand but as soon as suitable space becomes available with good connectivity that demand appears,” he says.
Connectivity is one of the key issues and he says canny developers will see the value of including super-fast broadband from the outset.
“We have had deals fall through because it is not viable to make that connection,” he says.
There also aren’t an abundance of development opportunities but he says there is demand for space from suites for start-ups up to 20,000 sq ft for more established businesses.
Case study: Beside the sea in Bournemouth and Poole
In the Tech Nation report, Bournemouth has 26% high-growth businesses, putting it towards the top of the league table for the country.
Digital and animation businesses are particularly prevalent and Nella Pang, JLL, says it is the universities that are the main draw.
“A lot of people in the film industry studied down in Bournemouth,” she says.
It also has an airport with flights to Manchester with its booming tech cluster and good rail connections to London, plus it has a beach and the New Forest on its doorstep. And with wellbeing increasingly important, it is a big plus point. Tech City’s Dr George Windsor says its coastal location no doubt plays a part in its attractiveness.
Like Truro, its commercial space is cheap, with headlines rents around £18.50 per sq ft compared to £21 in neighbouring Southampton and recent new developments have been a mixture of uses to make schemes viable.
Case study: Evolution from dot.com to tech in Reading
Reading and the Thames Valley were the darlings of the dot.com boom and telecoms businesses, but that doesn’t mean it became a natural location for new digital and technology businesses.
“Reading’s strength is its heritage, which gives it its pool of talent. It was traditionally seen as a location for big businesses and I can see why they are based there, close to London,” says Dr George Windsor, senior insights manager, Tech City UK.
Guy Parkes, director, RARE, which is based in Reading, agrees: “Reading does well for corporates, but had to catch up a bit as Shoreditch became the go-to place for SMEs.”
The evolution has included setting up networking organisations and creating different space.
Parkes says most of the new or newly refurbished space being marketed has collaboration space and/or café-style space: “It’s very London-esque.”
While Reading’s rents are substantially higher than other “tech towns” at around £38 per sq ft for top-quality space, it is still substantially cheaper than the £70-90 per sq ft you would pay in central London, depending on location.
Finding small amounts of space can still be tricky, as much of Reading’s office stock was originally designed for single occupancy. Parkes says take-up this year is expected to be on a par with last year, but the majority is smaller deals – a sign, perhaps, that the evolution from corporate haven to SMEs hotbed is working.
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