The Digital Sector in East Anglia – how are we doing? The Department for Digital, Culture, Media and Sport (DCMS) recent report ‘Assessing the UK’s Regional Digital Ecosystems’ makes for interesting reading regarding the health of our region’s tech sector in comparison to others, and the opportunities for growth over the coming years. A t a National Level, the digital sector employs 1.66 million people, accounting for 4.9% of all employment and the sector contributed £148 billion (gross value added – GVA) to the UK economy representing 7.6% of the whole. The report draws attention to the developing clusters in Norwich and Ipswich providing much needed diversification away from the obvious hub of Cambridge and draws attention to the important work being carried out by the various hub/incubator providers such as Innovation Martlesham, the Innovation Centre and Knowledge Gateway (Colchester) and the EpiCentre (Haverhill) as well as the key contributions of Tech East and Anglia Capital Group, both of whom Scrutton Bland is pleased to partner with.
The report notes that whilst growth has been strong across all of the UK’s regions, this has been particularly pronounced in larger cities which is perhaps a negative for our region on the basis it contains only one such location (Cambridge). The overnight adoption of large scale home working brought about by Covid-19 is a double edged sword in this regard, because whilst it has broken down some of the geographical boundaries and the draw of the larger cities, it has at the same time introduced significant wage inflation to the regions where talented people that did not want to move or commute to places such as Cambridge and London, accepted the reduced earning capacity that brought about can now enjoy the best of both worlds from home. Nationally and regionally, access to talent was consistently highlighted by the DCMS as the most significant barrier to growth. This is by no means unique to the tech sector, but given that the report highlights that growth of £41.5 billion and almost 700,000 jobs is achievable by 2025 nationally, finding innovative ways to break down these obstacles is essential if our region is to take its share (and hopefully more) of that prize. It is noteworthy that between 2016 and 2020, 73% of private funding raised in the digital sector went to London-based businesses. Obviously anything that can be done to shift that dial by even a small percentage would provide a welcome boost to the regional sector and the economy generally. Looking more closely at the report’s findings on the East of England’s digital sector it is interesting to note that it accounted for 5.1% of total output, but perhaps a little disappointingly the annual growth in the sector between 2014-2019 sat at 3% which is behind the national trend.
Agriculture and Insurance are two sectors that are synonymous with our region and the report rightly points to the significant concentrations of AgriTech and InsureTech businesses which have huge potential for growth over the coming years.
Of course, there are challenges which we as a digital/tech community need to focus on to address; most notably:
• The region is in the lower quartile for growth in the sector nationally
• Earnings as a percentage of house prices are the second lowest in the UK regions
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Ultra-fast broadband coverage is poor
• Top performing graduates are leaving the region, even accounting for the inevitable impact of the international draw and subsequent return home of some Cambridge students • Perhaps most worryingly, despite the expertise of the region’s Higher Education institutions, the number of computing students relative to population is the lowest of all UK regions. None of these issues are insurmountable, but only by being cognisant of them and working together to address them can we release the full potential that our region undoubtedly possesses.
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