Future Cities talks to CBRE about levelling up the North and burgeoning tech cities
Image: Elevation from architects Chapman Taylor of Manchester Goods Yard in the St. John's regeneration development, at the heart of the city's newest media and technology hub (for developer Allied London and funded by Aviva Life & Pensions)
What are the vital ingredients for a sustainable tech city and how has that changed since the pandemic? CBRE's Head of Technology Sector Vertical, Mike Gedye, and Jennet Siebrits, Head of UK Research, have been talking to Future Cities about Manchester, Edinburgh, Glasgow and Birmingham - the mix of qualities that each city has and the signs that tech clusters in these areas are set to grow in the future.
CBRE recently published its report on Tech Cities UK, rating cities for how well they are growing their tech industries. Manchester is still in top position for the most important tech city outside London and research shows that it is the combination of emerging talent from the city's universities, as well as the collection of media outlets in Salford - anchored by the BBC - as well as the city's own Northern Quarter, that has contributed to its success.
'You need not just technical but creative talent to help these districts thrive. A lack of diversity in the talent pool historically has hampered the growth but now funding addresses diversity as well as university courses needed to attract a wider range of students to fulfil their ESG goals.
'Manchester has a confluence of university talent and media around Salford as well as start-ups. Bring all that together as a creative whole and you have a sustainable tech city. We are not seeing a chaotic distribution from tech investment because there is a value from clustering. There are a small number of UK cities now benefitting from growth outside London. Leamington Spa is one of them. Twenty thousand new jobs have been announced there and we will see this regionalisation growing with a clustering of talent and tech businesses to include cities such as Glasgow, Edinburgh and Bristol.'
'There has been an emergence of different drivers and it comes down to diversity, A lack of diversity of talent pool historically has hampered the growth but now funding addresses diversity as well as university courses needed to attract a wider range of students to fulfil their ESG goals. Birmingham now has nineteen per cent more degree educated women than men and the broader tech and life sciences industry in the city enables employment. Traditionally women have had a lower representation in tech.
How has working from home also helped to create momentum for tech developments?
'The 'pandemic mobility' i.e. people being able to work anywhere and from home is a significant factor. This has been shown in the US where investment has moved away from Silicon Valley to other American cities, enabled by hybrid working and a broader workforce.
Silicon Valley has been choked by infrastructure challenges - affordability and access - and also cities like Los Angeles take three hours to cross by car. No one has the appetite for that post pandemic. Employees are now being given empowerment about where they work and they are being able to make a lifestyle choice. Utah created a brand for itself around the 'Silicon Slopes' attracting employees to work in the clean air of the mountains.'
On transport connectivity, Jennet added:
'In the UK, with levelling up, infrastructure is important but in certain cities it might be much more around local road provision with people living in rural locations. We need more park and ride and this is a fallout from the pandemic with people not wanting to travel great distances.'
How does the cost of living affect the sustainability of tech cities?
'In cities such as Glasgow the cost of living is lower as well as housing rents, coupled with good educational institutions, and this makes for places where graduates want to stay. It's all these factors rolling together and not one single element that makes these tech cities successful. It also doesn't have to be about having the best university. Reading's proximity to London helps that town. Geographically in the UK compared to Europe as a block, means that you are relatively close to London. It is easy to get to and from regional tech hubs. So a young person building a career previously had to live in London. Now you can do a job from anywhere and you can also build a tech offering outside London, but it is still true that some cities lend themselves better to doing this. The other benefit of the UK compared to Europe is that all cities are under the same employment law.'
'Larger tech companies before the pandemic had a hub and spoke approach but now you probably don't need 'touch offices' anymore with more people working from home. You need a smaller number of higher quality offices to create destinations for employees. For some UK companies there will be around a thirty percent return to the office, so you need amenities for health and wellbeing, places where the employee as consumer will feel better after they have spent a day at the office. Places where diversity is recognised too, places where you can learn, connect and share.
'Scale is important. These large tech companies are now employing a thousand compared to two-hundred people. You don't need them in all the time. Tech is growing as an industry so the quantum will mean that there will be enough people going into buildings in cities at any one time and they will therefore sustain their brands.'
How do Scottish cities rank compared to English cities for tech development and how is the UK competing with Europe and beyond?
Mike pointed out:
'Edinburgh has a strong track record with its global universities as well as hospitals and the innovation coming out of them - they are centres of excellence. Glasgow now has a data lab, a census lab and a digital health and innovation centre. These are jewels that create investment funding from the public sector, with all the start ups that sit around them, that then in turn attracts companies such as JP Morgan and Barclays because they want to be the first to see payments systems around AI for example. Employees could live in Glasgow and commute to Edinburgh because of the connected transport and there is also now a lot of development taking place around the new Queen Street Station in Glasgow. This is the start of speculative building in these cities.'
'Countries in Europe all have regional markets too. Israel is developing a large tech sector as is Africa. It's significant that in European countries they often don't have the scale. The affordability in Eastern Europe is now not there as a lots of Europeans went back to their home countries and maintained their salaries. However capital is as equally mobile as talent and clients are looking in all markets.'
In conclusion, how important is developing city brands for tech hub sustainability?
Mike and Jennet described the challenge going forward for tech cities:
'Regional developers were embracing the brand of buildings with good facilities before the pandemic, pulling interest away from London and using the industrial heritage as an attraction with building the new alongside. This is where Glasgow has an opportunity. It has architecture and a slight edginess that is appealing to creatives and the tech industry. Bristol is another city with a rich heritage. Cities and buildings have to have personality and brand. It is now down to the cities themselves to market their brands, to seed ideas to investors and employers. Each city must carve out its individual brand, be famous for something, rather than saying it does everything. Manchester has done just that and it is its strong personality that has allowed it to compete.'
Please Join our Manchester forum in June to discuss more on developments for the creative, media and tech industries, to be held at the Science and Industry Museum (Image below courtesy of the Board and Trustees of the Science Museum Group).