17 Jul 2023

Innovation and the city – Why Greater Manchester is leading the Northern tech revolution

Today one of the most exciting elements of Manchester's tech renaissance is its booming start-up ecosystem, which has seen more than 1,600 new enterprises launch in the city in recent years.

This growth has also placed it in a ripe position for public sector investment, with recent announcements from the Department for Science, Innovation and Technology hailing that the government is committing £3.5 billion to the future of science and tech. Around £1BN of the funding has already been pledged to support the next generation of supercomputing and artificial intelligence (AI) research, and in our opinion, there’s no better home for this than Manchester.

In recent years, the city has a seen a host of associations emerge to support its burgeoning FinTech, business and tech communities, including Manchester Digital - the voice of Greater Manchester’s tech and digital sector. Today the trade body works across five key areas of focus to develop a healthy ecosystem, addressing innovation, talent, skills, and infrastructure by raising the profiles of people and businesses, and helping with promotion.

The organisation has also developed a suite of ground-breaking Digital Apprenticeship programmes for software developers, business analysts and data analysts, bolstering the regions reputation as a hub for highly skilled professionals – something of vital importance as more technology businesses make Greater Manchester their home.

Northern innovation

Manchester may be about 2,000 years old, but in business terms it's a young city. No fewer than 57% of the region's companies are in the seed and venture stages, according to data specialist Dealroom. Over the past five years, Manchester-based companies have also collectively raised over £1.8bn in venture capital funding, which positions it as a major powerhouse for start-up innovation - no matter the sector.

"Manchester’s thriving tech start-up scene is packed with innovation, fuelled by record levels of funding from 2022 and is outperforming much larger cities on the continent," said the UK's digital economy minister Paul Scully during a visit to Manchester's Digital Skills Festival in February 2023.

The regions start-ups have also found enormous success, producing six unicorns (private companies worth over $1bn), including fintech Interactive Investor and connected car data platform Wejo, and eight futurecorns, the name given to fast-growing tech companies expected to be worth over $1bn in future.

With $124m of funding, AI business platform Peak is among the most notable and exciting of Manchester's futurecorns. Others include electric vehicle (EV) charging company Be.EV, which raised a record £110m in October 2022 to expand its public charging infrastructure across the UK; plastic-free delivery firm The Modern Milkman, which raised £50m in its latest funding round; and Freedom Fibre, which raised £84m in May to power its high-speed broadband rollout in partnership with Salford-based TalkTalk.

Close behind them is biopharmaceutical pioneer F2G, a spinout from Manchester University which discovers and develops novel drugs to treat life-threatening fungal diseases. F2G has just moved into its new base at the MediaCity campus in Salford, after raising £57m in its latest funding round - even more than its new Manchester neighbour and fellow biomedical innovator UK Biobank.

For the most exciting of these new firms, AI plays a vital role. Paul Scully has been vocal in his support for AI, and warns that "dystopian" scare stories distract us from "all the good that AI is already doing - how it's mapping proteins to help us with medical research, how it's helping us with climate change.” Something which many agree it will only get better at.

Labour's shadow culture secretary Lucy Powell also voiced similar support, stating there is a "level of hysteria going on," in a recent BBC interview, and we need to be careful not to let it overshadow the "real opportunities with the development of AI."

How Kao Data is helping AI start-ups thrive

Spencer’s previous blog explored many reasons why Manchester has become a leading tech hub. Chief among this is a thriving digital infrastructure ecosystem that enables AI businesses and other users of industrial-scale computing to grow.

At Kao Data, we believe our new 40MW data centre will directly underpin Manchester’s booming start-up and research ecosystems, and will play an important role in both accelerating the city’s position as a UK digital hub and supporting the government’s ambitions to become a world-leading superpower in science and tech.

The data centre itself is not set to become operational until 2025, but the sustainable redevelopment project will soon begin, creating new jobs for local experts in construction and tech. In the meantime, we’re excited to see what’s next for Greater Manchester’s incredible technology and business communities, and we’ll continue to engage with stakeholders at all levels to make our platform expansion a success for the North West.

For readers interested to learn how we’re supporting AI start-ups with high performance infrastructure, you can learn more in our case study with InstaDeep, here.

Tom Bethell

Tom Bethell is one of Kao Data's Business Development Directors. With a background in IT Infrastructure; Tom has been working specifically within the areas of data centre colocation and high performance computing for a number of years.


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