22 Jun 2023

Manchester: Why the former cotton capital has fast-become the UK's new tech metropolis

The news that biomedical database UK Biobank will receive £127.6m to fund a move to SciTech’s Manchester Science Park has come as little surprise to many in the tech sector. With a plethora of inward investment and a hotbed of industrial-scale innovation, the UK's second largest city is fast turning into the UK's next digital metropolis and is set to become the country’s pre-eminent tier II data centre hub. Birthplace of the industrial revolution, Manchester is now at the cutting-edge of industry, only now it’s driven by science and technology, not cotton and coal.

UK Biobank's move is, in fact, the perfect example of Greater Manchester's technological evolution. The firm, one of the key names in the UK's bid to be a global leader in genetics and genomics, secured around £30m of funding in 2022 from UK Research and Innovation. That investment helped drive Manchester’s annual total tech funding to £532m, a 50% increase on 2021 and putting it ahead of international tech hubs such as Rome, Warsaw, Lisbon and Brussels.

Solid Foundations

Greater Manchester has also long been a favourite for world-leading brands, but in the last few months, Booking.com, Starling Bank and Workspace 356 have all announced plans to make the city their main UK HQ - something the likes of BBC, Siemens, Fujitsu and Sky have already done. From the perspective of banking, finance and professional services, other high-profile employers of the city's 60,000 tech workers include PwC, Deloitte, Lloyds Bank and Natwest, and the Greater Manchester region is now hailed as a hotbed of Northern innovation.

Pharmaceutical leaders including AstraZeneca, for example, have major bases in Manchester, while the region is home to some of the UK’s most advanced computing organisations including The Hartree National Centre for Digital Innovation at Daresbury, the SKA Telescope at Jodrell Bank, and a plethora of research focused universities who form an integral part of the pioneering N8 Research Partnership.

Hyperscalers have also recognised the wider technology and connectivity benefits the city has to offer, and businesses including Google, Amazon, Microsoft and Meta have begun to deploy nodes and infrastructure across the city. This, in essence, points towards the emergence in the near future of a new northern UK cloud region to contrast Slough and west London, but whether or not that becomes a reality is yet to be seen, and businesses across the data centre and infrastructure sectors are watching in anticipation.

Why Greater Manchester?

As the UK’s leading provider of high performance colocation, we’ve recently been asked ‘why Greater Manchester’, and ‘what really makes it different?’

The answer is simple, Greater Manchester, and more locally Stockport, where our new campus will be located, is a buzzing ecosystem of start-ups, scale-ups and enterprise, where many of the world’s leading businesses are thriving. It has access to world-class transport routes, land, plentiful power and most importantly, highly skilled people – something vital for the future of the tech and data centre sectors.

To add further context, in March 2023, relocation specialist Immigram placed Manchester at the top of its UK Tech Hubs list, naming it Europe's fastest-growing digital city. Today the city has access to digital and educational infrastructure, not to mention rents that are a fraction of those in the South of England. But perhaps the biggest reason is investment.

Greater Manchester mayor Andy Burnham has long spoken of his vision for the city as a global digital leader, stating that tech has the power to bring the city and the people with it, and this focus has helped attract investors from all over the world. In a social media post he stated, “Greater Manchester is the fastest-growing digital and tech hub in Europe and we are fast becoming the UK’s leading digital city-region.”

Between 2018 and 2020, Manchester tech firms secured a tenfold increase in investment, from £48m to £519m, and after the lockdowns of 2020 and 2021, investment bounced back to £532m in 2022, and is on course to top £600m in 2023.

This unprecedented investment outside the nation’s capital has helped create hubs of tech collaboration and support in the city and the Greater Manchester region. The best-known example is MediaCity, home to 250 media and digital businesses that include the Dock10 collaboration, ITV and the BBC.

Among the benefits enjoyed by companies based in MediaCity are low-latency, diverse connectivity provided by high-speed outdoor Wi-Fi across the whole estate, and a 5G, fibre and Internet of Things hub known as the Vodafone 5G incubator. Little wonder MediaCity was named Europe's first "connected neighbourhood" in 2020, and second in the world after New York City.

Manchester's thriving start-up scene

What really sets Greater Manchester apart, however, is its booming start-up ecosystem. More than 1,600 start-ups and scale-ups are based there, and according to data specialist Dealroom, 57% of the city’s companies are in the seed and venture stages. 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 newest collaborative hub is SpaceportX, the brainchild of local hero Doug Ward, founder of the co-working space TechHub Manchester. Ward is convinced that Manchester can become one of Europe's top five start-up destinations and firms using his SpacePortX technology include US digital agency Atlarge, whose CEO and founder Anand Pallegar recently hailed Manchester as a "deep pool of engineering talent".

The rapid growth of Manchester's tech start-up ecosystem has created a market for firms to provide training and upskilling. More than 50 Manchester-based start-ups exist purely to retrain the city's workforce to cater for its growing tech scene. For example, Northcoders was founded in 2015 to train people for careers in software development and cyber security, and it's seen more than 1,500 people graduate from its courses to claim positions in companies such as The Co-Op Bank and Footasylum, and Arctic Shores created an AI recruitment platform to help firms find the right talent.

We at Kao Data, have long recognised the benefits that Manchester offers to the business and research communities alike, and have recently invested £350m in the region to make it the next strategic location for our high performance data centre platform. This will be the first of our new Tier II locations in Europe, and will provide some much needed sustainable digital infrastructure to the plethora of enterprise and start-up organisations based in Manchester.

In our next blog, we'll look at the most exciting artificial intelligence (AI) start-ups across the Northern Innovation scene. These ambitious firms are taking full advantage of Manchester's capabilities as a breeding ground for ground-breaking AI projects, from bot-detecting security platforms to Mind Tracing™ and gamified recruitment tools.

Spencer Lamb

Spencer Lamb is Chief Commercial Officer at Kao Data and an experienced figure within the industry. He has a keen interest in HPC, AI and hyperscale computing.


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