By Katie Gallagher OBE, Managing Director at Manchester Digital
Manchester is at a pivotal moment as a leading tech hub in the UK. The city was the heart of the Industrial Revolution, as well as being the home of the first computer, Baby, and it still retains that innovative, disruptive spirit today and now is at the forefront of the new wave of emerging technologies.
When we talk about emerging technologies we mean innovations that are in the early stages of development or adoption and have the potential to significantly disrupt industries, create new markets, or transform the way we live and work. These technologies often harness advancements in science, engineering, or computing to solve complex problems or improve existing processes.
Many of these technologies are already impacting our lives in different ways. While technologies like AI and virtual reality capture media attention, some of the most transformative technological advancements may remain largely unnoticed by the general public. Other technologies, such as quantum and Blockchain, will play a part in revolutionising healthcare, manufacturing, the energy sector, the public sector and many other industries. These technologies can be a catalyst for fuelling growth and productivity, making better business decisions and unlocking value.
It’s undoubtedly been a tough year for tech companies and next year will possibly see more global instability and economic belt tightening. However, a recent survey by RSM indicates that 84% of UK AI companies are confident that their businesses will grow..
Manchester was named as the most AI ready city in the 2024 SAS AI cities Index so is well-positioned to be a national leader in developing new technologies. Our Emerging Tech Conference serves as a rallying point for the community to shape a future that’s innovative, growth-driven and offers a huge opportunity to our diverse communities across the region.
So the question must be asked - what does our tech sector need to be able to fulfil its potential and play a key part in the UK’s tech-driven growth?
We have talked about many of the issues previously in our Startup Review and Startup Update, but looking ahead to 2025, I will outline the key issues that the emerging tech sector needs in order to grow.
AI regulation
The UK Government published a White Paper which proposes a framework for AI, in March 2023, which is a light touch attempt at regulation. In August this year, the EU introduced its AI Act to provide a uniform framework across the EU. Businesses in the UK that develop or deploy an AI system in the EU must comply with these regulations.
There is an argument for the UK creating its own AI regulations, and ensuring they’re aligned with the EU and other countries, for ease of trade outside the UK. On top of that, regulation would establish clearly defined parameters and frameworks within which businesses can operate, as well as creating more consumer trust around ethics and use of data.
More investment opportunities
Manchester and other Northern cities require more venture capital, angel investors and other funding opportunities. Many of our Greater Manchester startups report that being outside London means less VC funding opportunities, to the point where some of them open a London office to negate this effect.
Our Startup Activator works closely with the region’s startups to offer them wide-ranging support to help fast track their progress. However, we still need more opportunities to showcase Manchester's emerging tech and startup scene and the benefits of investing here to a more global audience.
More support for research, academic and university spinouts
Manchester's universities are well-positioned to drive innovation by collaborating more closely with the region’s tech eco-system at large. Additionally, by enabling their own spinouts to retain higher equity stakes, universities can empower these businesses to scale up more rapidly, attract further investment and create more jobs.
Given the funding constraints faced by academic institutions, fostering partnerships with industry organisations, such as Manchester Digital, can amplify the impact of spinouts by expanding their community, accelerating growth and taking advantage of existing support networks. This collaborative approach would help these university spinouts transition from early-stage concepts to thriving enterprises capable of creating jobs and contributing to the regional economy.
The talent pipeline
The world of technology is changing rapidly and has already outpaced tech skills learned in school, colleges and universities. On top of this, tech employers are no longer hiring early talent in the numbers that they once were, due to the current economy.
A priority for the new Skills England body must be fixing the curriculum to ensure technology and digital skills are at its heart. We also need to see much more support for employers to be able to hire early talent and make apprenticeships and other training much more attractive to employers via a revised Apprenticeship Levy.
R&D tax credits
R&D tax credits have long been a crucial support for startups, but recent changes are causing real issues. Stricter compliance measures, prompted by misuse from some claimants, are creating uncertainty and delays in payments. For startups that rely on these credits to fuel innovation and manage cash flow, this shift is stalling growth and making it harder to compete on a global stage. We are looking towards the Spring Spending Review for further updates and lobbying for a more advantageous regional R&D tax credit to encourage tech innovation.
Global positioning
Manchester needs a more joined up view in terms of collaboration between public and private sector in how we interact with other global tech hubs, to showcase our tech ecosystem and investment opportunities and further participation in international tech events.
In conclusion…
With the right strategy, strong collaboration, and a focus on driving high-growth innovation, our city region has the opportunity to re-establish itself as a global leader, tackling technological, global, and political challenges head-on. As Managing Director of Manchester Digital, I’m looking forward to seeing Manchester step up and fully realise the transformative potential of emerging tech.
Find out more about our upcoming Emerging Tech Conference.
