How digital technology is fuelling the Northern Powerhouse

2020 had a profuse silver lining for Manchester. With investment having increased more than threefold between 2018 and 2019, it was dubbed “the fastest-growing tech city in Europe” in November 2020 in a report by TechNation and the search engine Adzuna. This was also the first time the city had come second in the venture capital investment league table behind London.

Manchester’s feat was given a considerable boost by the successful floatation of THG Holdings, the owner of online beauty retailer The Hut, headquartered in Manchester Airport.

The increasing popularity of Manchester as an alternative UK base to London for international business is further evidenced by the fact that Swedish web-hosting company Miss Group – the winner of the 2020 Northern Tech Award, and which maintained a growth rate of 232 per cent between 2018-19 – is also based here.

As Safe Hammad, CTO and co-founder of locally based start-up Arctic Shores – a provider of behaviour-based psychometrics – puts it, “in the last ten years, Manchester [has] transformed into a thriving technology hub attracting businesses and talent alike.”

However, many in the region believe that creating a London of the North without developing the entirety of northern England would be short-sighted. What needs levelling is not just a metropolis but a whole region with a population of 14.5 million, which if it were a country would be Europe’s eighth-biggest economy.

Similarly, if realising the oft-floated idea of a “Manufacturing Institute of Technology” is to prevail, both Manchester and Sheffield –  the latter with its widely respected Advanced Manufacturing Research Centre (AMRC) – will be likely candidates for its venue. Emulating a US university that is primarily a generously funded research centre with some added teaching that creates 30 spin-outs every year may turn out to be an overwhelming task, and the establishment of an “MIT of the North” from scratch has been received with scepticism.

However, creating a network of institutions, possibly using the AMRC’s template, may prove more popular than a standalone vanity project. The £5 million Northern Triangle Initiative, launched by the Universities of Manchester, Sheffield and Leeds in 2017 to smooth the process that turns research into business, can serve as a core for such a network across the North.

Indeed, the importance of commercialising innovation is demonstrated by the painful absence of northern companies from lists of products that use graphene, when it was that very revolutionary material that put Manchester and the region at the forefront of international advanced material research.

Putting digital technology at the heart of northern reindustrialisation

The Northern Powerhouse, a concept dating back to 2015, goes well beyond establishing a big city in the North that can take London on. As the following examples will demonstrate, the whole North West and the other two clusters of the Northern Powerhouse (the North East and Yorkshire and Humber) have already made great strides in adopting and excelling at digital technology, especially in green energy, immersive solutions and health- and bio-tech.

There are several ongoing local business projects which stand out on not only a national but also a European level. 

Hornsea, on the Humber in Yorkshire, for example, has become a flagship project for UK off-shore wind, the most successful branch of the domestic renewable energy sector. Hornsea is a brand-new project of Danish energy giant Ørsted, but there are also examples of how coal-based energy companies are reinventing themselves.

Drax power station, for example, in 2016 still relied on coal for 30 per cent of the energy it generated, but is set to burn its last coal altogether in 2021 – once it has fully converted to biomass generation, it will become one of the most ambitious decarbonisation projects in Europe, even if the sustainability of biomass is contested by some.

Another example of an incumbent steeped in legacy technology reinventing itself is Northumberland-based Tharsus, founded in 1964, which managed to stay relevant by becoming a robotics specialist in addition to its original metalwork business.

The unprecedented disruption that the pandemic caused has also provided some of the most digitally advanced northern companies with a moment to shine. KCom, the internet provider supplying Hull with ultrafast broadband, winning it the “first full-fibre city in the UK” tag, ensured a smoother switch to online schooling and remote work in the area than was possible in many other parts of the UK.

Meanwhile, Gateshead College in the North East, thanks to its collaboration with PROTO, Europe’s first dedicated centre for emerging technologies, could immediately switch to remote learning by giving access to the immersive PROTO facilities and its experts via virtual technology.

More recently, NHS England has mandated that all NHS Trusts are to use the National Pathology Exchange (NPEx) of Leeds-based X-Lab – originally set up in 2006 to connect all UK labs – for electronically transferring test requests and result in order to rectify the shortcomings of the Covid-19 test and trace system.

The examples above are the pinnacles of northern digital achievement. Alongside new national digital institutions set up in the Northern Powerhouse (National Horizons Centre, National Innovation Centre for Data), they inarguably go a long way towards levelling up the North. Unlike in other sectors, tech companies’ revenues increased by an average 9 per cent in 2020 on the previous year and employment in the sector remained stable, according to Mustard Research Agency.

But to tap into the digital potential, even non-digital businesses large and small need to do their homework. As the two-year Made Smarter North West pilot programme, which had the participation of 1,100 North western SMEs, concluded, these companies need capital and guidance to reach their full digital potential. A finding that most probably applies to the whole Northern Powerhouse.


To learn more about the individual regions of the Northern Powerhouse, read the UK Tech Reports by London Tech Week and UK Tech Cluster Group: Yorkshire and Humber, North East, North West.


© Business Reporter 2021

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