8 regional hotspots for fast-growth tech companies in the UK

The UK’s tech sector is undergoing a period of extraordinary growth, transforming the country into a global leader in innovation. While London continues to lead the way with its digital tech turnover, exciting things are happening beyond the capital. Across the UK, regional tech hubs are cementing themselves as powerhouses in their own right, creating new jobs, driving innovation, and boosting the economy in areas like AI, fintech, creative tech, and aerospace.

The UK’s thriving tech landscape

In their 2024 report, the ScaleUp Institute found that despite representing just 0.6% of businesses in the UK, scale-ups were responsible for 55% of SME turnover. The UK now boasts over 34,000 scaleups and with an additional 16,450 businesses in the scaling pipeline, the importance of regional clusters in supporting tech expansion is clear – providing thriving local ecosystems that support access to talent, investment, and infrastructure.

The latest rankings from The Sunday Times 100 Tech further highlight this trend, with the three highest ranking businesses based outside the capital. Manchester-based Evergreen Life, a leading healthtech company, topped the 2025 rankings with a staggering 554% revenue increase, closely followed by Allica Bank, a disruptor in the SME banking market headquartered in Milton Keynes, with 537% growth. Third in the running was UrbanChain, another Manchester-based company operating in the green energy marketplace, which saw 334% revenue growth.

The fasting-growing software companies outside of London according to The Sunday Times are:

Rank Company Description HQ Location Annual growth
1 Evergreen Life Digital health services Manchester 554.09%
2 Allicia Bank Fintech Milton Keynes/London 536.98%
3 UrbanChain Green energy marketplace Manchester 334.39%
11 Mind Foundry AI Software Oxford 216.85%
18 ANNA Money Business accounting services Cardiff 140.10%
27 Tandem Fintech Blackpool 104.02%
42 OnBuy Digital marketplace Bournemouth 80.76%
43 Thrive Workforce learning platform Nottingham 80.73%
46 Stannp Direct mail platform Barnstaple, Devon 75.70%


Regional hubs are playing an increasingly vital role in shaping the UK’s digital future, so understanding their unique strengths and specialisations is more important than ever. Let’s take a look at the UK’s seven regional tech hotspots in more depth

1. Reading and Thames Valley

Neil Brackstone, BDO Tax Partner, and Daniel Henwood, BDO Audit Partner, Clare Hawthorn, BDO Partner

What's the lowdown?

The Thames Valley, often dubbed the "Silicon Valley of Europe," continues to strengthen its position as one of the UK’s most prominent tech hubs. Known for its thriving ecosystem in fintech, data technology, cybersecurity, and space tech, the region has become a magnet for investment and innovation.

As of 2024, the region's tech sector has contributed £10 billion to the British technology economy. This success has positioned the region as a key player in the UK’s digital economy, with over 8,000 digital companies and 60,000 digital specialists calling it home.

This robust ecosystem is fuelled by world-leading research and development, including the Thames Valley Science Park in association with University of Reading, along with links to the University of Oxford. The Thames Valley Chamber of Commerce is also playing a pivotal role, driving even more investment into the region and promoting its world-class research and development capabilities.

“The growth we’re seeing in the Thames Valley is a testament to the region’s vibrant tech ecosystem, supported by strong infrastructure and talent,” says Daniel Heywood, BDO Partner. “With a combination of world-class research, strong industry ties, and a supportive investment environment, this region has everything a tech business needs to thrive.”

What are the key industries and sectors in the Reading and Thames Valley tech hub?

The Thames Valley hosts a diverse mix of established tech giants and innovative startups from media to space technology. Major corporations like Microsoft, Virgin Media, and Siemens have a strong presence here. Notably, three of the world's top ten telecommunications companies – Telefónica O2, Verizon, and Vodafone – are headquartered in Slough, Reading, and Newbury, respectively. Slough also boasts one of the largest concentrations of data centres in Europe, with over 333,000 square metres of facilities.

Space technology continues to be a significant area of focus. The Thames Valley is already home to numerous space tech companies, and recent initiatives like Project Skyways, led by Reading-based Altitude Angel, highlight the region's leadership in drone and space technologies.

One of the major developments driving the region’s success is the rapid expansion of artificial intelligence. Reading has emerged as one of the largest AI hubs outside London, with 170 AI companies employing around 27,000 people. Companies like Dynatrace and CloudFactory are at the forefront of AI applications and data processing, contributing to the region’s status as a leader in emerging tech.

Cybersecurity is another growing sector. The region is home to 676 cybersecurity companies, including major players like McAfee, Sophos, and FireEye. The availability of a strong talent pool and access to research and development at the University of Oxford's Cyber Security Centre continues to fuel growth in this area.

What draws tech companies to the Reading and Thames Valley area?

A combination of strategic location, competitive costs, and access to top talent makes the Thames Valley – and Reading in particular – one of the UK’s most attractive regions for tech companies. Firstly, office rents in Reading are up to 50% lower than in London, yet the area benefits from excellent transport links, including the Elizabeth Line, which connects Reading to central London in just 25 minutes. This affordability, paired with proximity to major hubs like Heathrow Airport, makes it a prime location for businesses wanting easy access to global markets without the overheads of the capital.

Access to top-tier talent is another major draw. The University of Reading and close connections with the University of Oxford provide a steady stream of highly skilled graduates, particularly in technology and engineering fields.

“The Thames Valley’s tech ecosystem is incredibly inclusive and supportive,” says Neil Brackstone, BDO Partner. “Thanks to the strong network of local organisations, investment opportunities, and a collaborative spirit that encourages innovation and growth, it’s a place where businesses of all sizes can set up and thrive.”

What challenges are tech companies currently facing in Reading and Thames Valley?

One of the key challenges is the ongoing competition with London for top talent. “There’s a significant pull towards the capital, which can make it tough for the Thames Valley to retain and attract skilled professionals,” explains Neil. “The allure of London’s larger tech ecosystem and higher salaries continues to draw talent away.”

Another challenge is the impact of improved transport links, such as the Elizabeth Line, which while beneficial, has led to rising property prices and living costs. This enhanced connectivity is a double-edged sword, making access to the capital and all its investment opportunities easier, but also driving up costs which can be a burden for both businesses and their employees.

What’s next for Reading and Thames Valley?

Advancements in AI are expected to further bolster the region’s reputation as a major tech player. The region’s data centre sector will also see substantial development. New data centres are being built to meet the increasing demand for data storage and processing capabilities. This expansion will strengthen the Thames Valley’s position as a critical infrastructure hub.

The region's media sector, including new studios and production facilities such as Shinfield Studios and Arborfield Studios, is also expected to thrive, particularly with the growing intersection of AI and media. This merging of sectors could lead to groundbreaking developments in film and media production, driven by technological advancements.

“There’s a lot to be excited about in the Thames Valley,” says Daniel. “With a strong foundation and access to global investment opportunities, the future is looking exceptionally bright.”

2. North West

Mark Sykes, Head of Entrepreneurial Business, Sakib Isa, BDO Partner, Chris Heatlie, BDO Partner

What’s the lowdown?

Over the past five years, the North West of England has undergone significant transformation, establishing itself as a major tech hub in the UK. Manchester has been at the forefront of this growth, recognised as the fastest-growing tech city in Europe by Tech Nation in 2020. The region has experienced a substantial increase in its tech sector's size and influence, driven by a surge in investments and the expansion of tech-focused infrastructure.

One of the key drivers behind this transformation is the North West Cyber Corridor, a strategic initiative designed to bolster the region’s cybersecurity capabilities. This corridor includes a robust network of over 300 cybersecurity companies and has positioned the North West as the second-largest cyber cluster in the UK by investment levels. The corridor features significant players like Raytheon and BAE Systems, reflecting its status as a critical hub for national defence and security. With around 12,000 full-time employees working in cybersecurity and a target to expand this workforce to 30,000 by 2035, the North West aims to increase its annual Gross Value Added from £760 million to potentially £2.7 billion. This initiative underscores the region's commitment to becoming a global leader in cybersecurity, supported by collaborations with prestigious institutions and a growing talent pool.

“The cyber corridor is huge for the region,” says Mark Sykes, BDO Partner, “and the universities across the North West have mobilised around the initiative, collaborating with firms like British Aerospace to address future skills gaps and innovation needs.”

What are the key industries and sectors in the North West tech hub?

Cybersecurity is a major focus at the moment, with the North West Cyber Corridor spearheading efforts to address future cybersecurity challenges through partnerships between regional universities and industry leaders. This initiative is vital for developing a robust talent pool to meet the growing demand for cybersecurity expertise. Life sciences also play a significant role, with Manchester positioning itself as a centre of excellence, highlighted by the relocation of the UK Biobank to Manchester Science Park, which represents a major investment in research and development.

Manufacturing is another key sector, with the region embracing advanced technologies to enhance manufacturing processes and productivity. In the gaming industry, Manchester is home to Cloud Imperium Games, the developer of Star Citizen, illustrating the region's growing prominence in innovative game development. We’re also seeing a rise in healthtech and AI startups, reflecting a broader trend towards integrating advanced technologies in health and artificial intelligence.

What draws tech companies to the North West?

Several factors make the North West an attractive destination for tech companies. Firstly, cost of living is significantly lower than in London, making cities like Manchester appealing to young professionals seeking a high quality of life without the exorbitant expenses of the capital. Meanwhile, the presence of prestigious educational institutions like Lancaster University and Manchester Science Park foster a culture of innovation.

“The North West benefits from strong local government support,” Mark explains. “Metro Mayors Andy Burnham and Steve Rotheram have been proactive in promoting tech and economic development, prioritising initiatives that enhance the region’s tech infrastructure and support innovation.”

The region also offers a favourable business environment with modern, sustainable office spaces such as The Eden building, which features Europe’s largest living wall and emphasises sustainability, appealing to companies with green credentials.

What challenges are tech companies facing in the North West?

Despite its growth, the North West tech hub is not without its challenges. “Talent shortages are a significant issue,” says Mark, “particularly in specialised fields like cybersecurity. The demand for skilled professionals often outstrips the supply, leading to competition with other tech hubs and higher salary expectations.”

Infrastructure and transportation within the region also present challenges. While investments like the Bee Network are improving connectivity, issues related to transportation and internal connectivity remain. Rapid gentrification and development in the area, particularly in Manchester, can also lead to displacement and affordability concerns for local residents. These factors can create tension between the benefits of development and the needs of existing communities, impacting the overall growth and inclusivity of the tech sector.

What’s next for the North West?

The region is expected to see further expansion in its tech ecosystems, with continued emphasis on strategic sectors such as cybersecurity, life sciences, and advanced manufacturing. Investments in infrastructure and sustainability will likely drive future development, with projects aimed at enhancing green technologies and improving urban living conditions.

Regional collaboration is anticipated to strengthen, with ongoing efforts by leaders like Burnham and Rotheram to integrate tech initiatives across cities and sectors. The North West's focus on becoming a smart, sustainable region is expected to advance, with initiatives like the Manchester Climate Change Framework aiming to achieve net zero by 2038. As the region continues to innovate and invest in its tech infrastructure, it is well-positioned to enhance its status as a leading tech hub both nationally and internationally.

"Manchester’s tech sector is growing rapidly, with strengths in cyber, AI, and advanced manufacturing. This progress is driven by committed businesses, supportive local leadership, and a focus on delivery. Despite global economic turbulence, Manchester is working to create a stable environment for businesses, with growth outstripping the national average and tech playing a major role. However, challenges remain, such as limited R&D uptake among SMEs and a skills gap.  Where we see things working, we need to scale them. The renewed focus on regions through the Industrial Strategy and devolution deals is welcome, allowing Greater Manchester to plan long term and foster business-led innovation.''

Katie Gallagher, Managing Director, Manchester Digital

3. Bristol & Bath

James Eastell, BDO partner, Angela Appiah Shippey, BDO Director, Nathan Thomas, BDO Partner

What's the lowdown?

Bristol & Bath remains a vibrant and dynamic tech hub, ranked as the fifth best startup ecosystem in the UK by Beauhurst in 2023 with a total turnover of £4.15 billion from the region’s high-growth companies. This recognition underscores the hub’s continued relevance and strength in the tech landscape, building on its reputation as a breeding ground for innovation and entrepreneurial success, with a particular focus on purpose-led companies.

That said, the rapid growth that characterised Bristol & Bath’s emerging tech scene from 2017 through to the early 2020s has slowed somewhat as the hub faces new challenges, including the rising cost of living and a struggle for venture capital (VC) funding. Despite these challenges, the tech ecosystem remains robust, with a strong community spirit and a supportive network of incubators and accelerators that help nurture early-stage companies.

“Although our tech scene has definitely seen a plateau over the last couple of years, the region has some incredible success stories,” says James Eastell, BDO Partner. “The talent pool here is exceptional, and we continue to see new startups emerging with exciting potential.”

What industries and sectors are drawn to the Bristol & Bath tech hub?

The tech ecosystem is diverse, attracting companies in sectors from machine learning and artificial intelligence (AI) to aerospace and energy. The region is home to notable firms like BT, Ovo, Dyson, Airbus, HP and Hargreaves Lansdown. Meanwhile, Immersive Labs is perhaps Bristol’s most prominent scale-up, a high-riser in the cyber industry with over £150 million raised in investment funds. The city’s creative credentials are also impressive, with well-known names such as Aardman Animations and the BBC’s Natural History Unit calling Bristol home.

“Perhaps the most notable feature of the ecosystem is the number of purpose led or B-Corp companies, addressing challenges in areas such as diversity and inclusion and sustainability. This is coupled with strong representation in deep tech, building on the region’s strong engineering and aerospace pedigree.”

Why start a tech company in Bristol & Bath?

The region offers a unique environment for tech startups, underpinned by its four leading universities: University of Bristol, Bath Spa University, University of the West of England (UWE) and the University of Bath. These institutions provide a steady stream of talent and innovation, supported by a network of incubators and accelerators like SETsquared, NatWest’s Entrepreneur Accelerator, and Future Space. “Our universities are key,” says Eastell. “They create a lot of spin-outs and have strong links with local incubators, which helps generate a high number of startups.”

Bristol’s cultural ecosystem, characterised by activism, creativity, and social justice, also plays a significant role in attracting entrepreneurs. “There’s a strong sense of purpose here,” Eastell explains. “It’s a place where socially conscious businesses can thrive.”

Major festivals and events include Bristol Technology Festival, which attracts over 5,000 attendees every Autumn, Bath Digital Festival and The SPARKies, noted as the largest tech awards outside London.

What challenges are tech companies currently facing?

The high cost of living in the region has become a significant challenge for the tech industry, particularly for early-stage startups. As house prices surged over the last couple of years, the cost of living in Bristol has made it increasingly difficult for people to afford to live in the area.

“The high cost of living discourages potential entrepreneurs from leaving secure corporate roles to take the risk of joining a startup, where remuneration is less certain. This also makes it harder to attract and retain talent, posing a barrier to the growth and sustainability of the tech ecosystem.”

Another challenge is the fight for VC funding. There is a solid track record of creating startups, but supporting these companies through to maturity is proving increasingly difficult. “We’re great at creating startups, but scaling is another story,” says Eastell. “The result is that many promising companies are acquired before they can fully mature.”

What's next?

The Bristol & Bath tech scene is at a crossroads, with challenges to overcome but also significant opportunities on the horizon. The tech ecosystem has been largely self-driven, with limited political support, but there is hope that increased government focus could bring much-needed investment and infrastructure. “The new Labour government has already expressed a commitment to the scale-up industry as the future of the British economy,” says Eastell. “We hope to see many new opportunities and targeted funding rolling in over the next five years.”

Addressing the high cost of living, increasing access to local VC funding, and providing more affordable tech incubator and lab spaces are all critical next steps for the region’s tech industry. However, despite these challenges, the strong foundation in tech innovation and its vibrant community spirit suggest a bright future ahead, ensuring Bristol & Bath will remain a leading tech hub in the UK for years to come.

“We will likely see radical change in local, regional and national government over the next couple of years, so the time is very much now ensure the sector fulfils its potential, and its responsibility to Bristol & Bath city region. The tech and deep-tech sector is still thriving but has ‘growing pains’ from the journey over the last decade and much work is going on to continue in our spirit of collaboration and support of new and emerging businesses. 

I expect further progress on the focus of new businesses on applications that solve our big societal challenges. To achieve that we need to enable more inclusive employment – tapping into the richly diverse talent pool that exists here, to create better products and businesses, and close the equity gap that is problematic for so many.”

Nick Sturge MBE BEng CDir, Chair, techSPARK 

4.  Birmingham

Ross Northall, BDO Partner, Simon Bird, BDO Partner, Alper Dervish, BDO Director

What’s the lowdown?

Over the past five years, Birmingham and the wider Midlands region have transformed into one of the UK’s most dynamic tech hubs. Traditionally recognised for its industrial and manufacturing heritage, the area has diversified its tech offerings and witnessed rapid growth across multiple sectors. Notably, Birmingham and Nottingham have become hotspots for tech start-ups, with substantial increases in investment, infrastructure development, and collaboration.

"The Midlands tech scene is thriving," says Ross Northall, BDO Partner. "We’re seeing a surge in start-ups, investment, and an expanding pool of skilled talent. The support from local incubators, accelerators, and educational institutions has been crucial in making this happen."

The region has also benefited from enhanced digital infrastructure, such as improved broadband connectivity and the rollout of 5G, making it more appealing for tech firms that rely on fast, reliable internet. The Midlands' diversification into sectors like fintech, healthtech and green tech has further strengthened its position as a resilient and innovative tech hub.

What industries and sectors are drawn to the Birmingham tech hub?

Birmingham’s tech hub has grown into a diverse and robust ecosystem, encompassing a wide range of industries. Fintech is one of the leading sectors, with companies developing everything from digital banking solutions to payment processing technologies. Healthtech is also thriving, driven by close connections with local universities and medical institutions that support the development of digital health solutions and healthcare software.

The city has seen growth in edtech, as companies create digital learning platforms and educational tools, while the cybersecurity sector continues to expand in response to the growing need for data protection services. Other key sectors include e-commerce, software development, and digital marketing, each contributing to the region's vibrant tech landscape.

Emerging industries such as green tech and gaming are also making their mark, with firms focused on renewable energy solutions and developing innovative digital experiences. The region's creative sector further complements these tech advances, especially in online gaming and digital content creation.

Why start a tech company in Birmingham?

Birmingham offers a compelling mix of advantages for tech companies. A key attraction is its extensive and diverse talent pool, bolstered by a network of universities and educational institutions producing a steady flow of graduates in tech-related fields. Additionally, operational costs in Birmingham are significantly lower than in London, providing cost-effective office spaces and living expenses, making it an ideal location for both start-ups and established companies.

The city’s strategic location and strong transport links, including an international airport and major rail connections, make it easy for companies to connect with clients and partners across the UK and beyond. Birmingham's supportive ecosystem also stands out, with numerous incubators, accelerators, and co-working spaces fostering collaboration and innovation.

“Birmingham is a city that champions tech innovation,” Northall explains. “With initiatives like Birmingham Tech Week and organisations like Innovation Birmingham, there’s always something happening to bring the community together and drive forward new ideas.”

What challenges are tech companies currently facing in Birmingham?

Despite its growth, Birmingham’s tech sector faces some challenges. A shortage of skilled professionals remains a concern, even with a strong local talent base. To bridge this gap, companies are increasingly partnering with universities to offer tailored training programmes, internships, and apprenticeships, but this requires continued investment and effort.

Funding is another issue, particularly for start-ups. Many investors remain concentrated in London, which makes it harder for Midlands-based companies to secure the necessary capital. While local initiatives and networks are trying to address this, there’s still a trend of businesses relocating to other regions or overseas to access better funding opportunities.

Increased competition among tech firms for talent and clients has also been noted, but there is hope that fostering a collaborative environment – through shared workspaces, industry meet-ups, and joint projects – can help mitigate this issue.

What's next for Birmingham’s tech sector?

The future looks bright across the Midlands, with several exciting developments on the horizon. The Midlands Engine Investment Fund (MEIF) continues to support small and medium-sized enterprises, helping start-ups gain traction and scale up. Additionally, the West Midlands Digital Skills Consortium (WMDSC) is a transformative initiative addressing the urgent need for a skilled digital workforce in the West Midlands. By fostering collaboration between educational institutions, businesses, and strategic partners, WMDSC empowers local enterprises—from SMEs to larger corporations—to thrive in a tech-driven economy.

Infrastructure projects such as the 5G rollout and smart city initiatives in Birmingham and Coventry promise to enhance digital connectivity and create new opportunities for tech innovation. Improved transport links, including the ongoing HS2 high-speed rail project, will further enhance connectivity within the region and beyond, making it easier for companies to attract talent and do business.

“There’s a real sense of momentum here,” says Northall. “The next few years will be crucial in building on our current strengths and ensuring Birmingham remains a leader in the UK tech scene. With the right support and infrastructure, I’m confident we’ll see even more growth and innovation coming out of the Midlands.”

"The region's tech scene has undergone a remarkable transformation, evolving into a vibrant ecosystem that fosters innovation and collaboration. The city's unique blend of talent, infrastructure, and community spirit has positioned it as a leading destination for tech start-ups and established companies alike. The West Midlands' tech sector contributes £16 billion to the regional economy, with 3,000 businesses employing 144,000 people. These figures underscore the dynamic expansion and resilience of our digital economy."

Yiannis Maos MBE, Founder & CEO, TechWM

5. South East

Owen Pettifor, BDO Audit Partner, Gareth Hill, BDO Director

What’s the lowdown?

The South East continues to cement its position as a leading UK tech hub, ranked third nationally, just behind London and Cambridge. As of Q1 2024, the UK tech industry was valued at an impressive $1.1 trillion, with the South East contributing significantly to this success. Over the past five years, the region has seen a steady rise in tech start-ups, particularly in the rapidly expanding AI sector. The advancement of AI has made it possible to tackle challenges once considered too complex or labour-intensive, driving significant demand across multiple sectors. This progress highlights the South East’s status as a vibrant and innovation-focused tech hub.

“The South East has consistently demonstrated its ability to stay ahead of the curve,” says Owen Pettifor, BDO Partner. “AI has been the real game-changer in recent years. Start-ups here are finding ways to integrate it into everything from healthcare to logistics, driving both efficiency and creativity.”

What industries and sectors are drawn to the South East tech hub?

The South East boasts an incredibly diverse tech ecosystem, supported by its strong academic institutions and innovation hubs. Guildford and Oxford, with the University of Surrey and Oxford University respectively, are key centres for technological development. These areas have become hotspots for industries like gaming and space tech. Brighton and Hove, meanwhile, stand out with the highest density of creative technology companies in the UK, reinforcing the South East’s reputation as a leader in Create-tech.

Beyond these, the South East is home to thousands of tech companies operating across an array of sub-sectors. Aerospace and defence giants like QinetiQ and BAe Systems cluster around Farnborough, while the region also hosts numerous digital and cyber security firms, often in partnership with universities. Other prominent sectors include biotech, data processing and hosting, fintech, cleantech, and medtech, showcasing the region’s wide-ranging expertise.

“The South East is unique in its diversity. From Guildford’s world-class game developers to Brighton’s creative technology companies, and Oxford’s breakthroughs in space tech, the region excels across multiple fields,” explains Pettifor. “It’s this diversity that makes the South East such a compelling place for tech companies to establish themselves.”

Why start a tech company in the South East?

The South East offers tech companies an enviable combination of lifestyle and opportunity. Excellent transportation links make commuting easy, allowing many employees to live in picturesque countryside villages while accessing top-tier employment opportunities in nearby towns and cities. The region is also home to some of the country’s best schools, creating a "best of both worlds" scenario that has only grown more attractive with the rise of remote working.

For employers, the South East presents a wealth of advantages. A deep talent pool, lower costs than London, and a concentration of universities and peer companies foster a vibrant and collaborative tech community. The proximity to London also provides significant benefits for investors, who can access the region easily and maintain close oversight of their investments. For international investors, excellent links to major airports further enhance the South East’s appeal.

What challenges are tech companies currently facing in the South East?

Despite its many advantages, the South East is not without its challenges. High living costs remain a barrier, particularly when compared to other regions of the UK. The rise of remote working has given employees greater flexibility to work from more affordable areas, creating additional challenges for South East-based companies in attracting and retaining talent.

Furthermore, the region’s proximity to London intensifies competition for talent, with many companies needing to match or exceed London pay scales to remain competitive. This has made retaining top-tier talent a persistent struggle, particularly for smaller start-ups.

What's next?

The South East’s future is shaped by two dominant trends: the rise of AI and the increasing focus on ESG. With London and the wider South East recognised as the third leading global hub for AI, this sector is poised to continue its rapid expansion. Similarly, climate-related tech is expected to gain momentum, reflecting growing investor and societal demand for sustainable solutions.

Looking ahead, the South East is set to remain a magnet for tech start-ups, driven by its proximity to talent and investors, its strong infrastructure, and its dynamic tech ecosystem. Although challenges like high costs and competition for talent persist, the region’s solid foundation in innovation and its adaptability ensure it will continue to thrive as a key player in the UK’s tech landscape.

“The South East is perfectly positioned to ride the next wave of tech innovation,” concludes Pettifor. “The ecosystem here is adaptive, collaborative, and primed for new opportunities.”

6. Cambridge

Paul Hughes, Managing Director, Life Sciences & Technology, Vinod Patel, BDO Partner

What’s the lowdown?

Cambridge has long been at the forefront of global innovation, earning its reputation as the UK’s ‘Silicon Fen.’ With a concentration of world-class research institutions, pioneering startups, and high-growth businesses, the city plays a crucial role in shaping the future of technology. Home to the University of Cambridge and Europe’s largest science park, it has been a launchpad for groundbreaking advancements across life sciences, artificial intelligence, semiconductors, and quantum computing. The Cambridge Cluster continues to experience rapid growth, with over 5,000 knowledge-intensive businesses generating more than £24 billion in annual revenue and employing 73,000+ people. The city is also a major magnet for investment, attracting over £4 billion in tech funding since 2020.

"Cambridge is an ecosystem where academia, industry, and investment seamlessly intersect," says Paul Hughes, Managing Director at BDO Cambridge. "The combination of world-class research, a highly skilled talent pool, and a collaborative business culture makes Cambridge an unrivalled hub for innovation and commercial success. With an environment that nurtures cutting-edge developments, the city continues to shape industries on a global scale."

What are the key industries and sectors in the Cambridge tech hub?

Cambridge’s tech ecosystem is driven by a diverse range of high-growth sectors, each contributing to the city’s global reputation for innovation. The life sciences and biotech sector is one of Cambridge’s strongest assets, with leading firms such as AstraZeneca, Abcam, Bicycle Therapeutics, and CMR Surgical at the heart of Europe’s largest life sciences cluster. The presence of the Cambridge Biomedical Campus and cutting-edge research facilities has positioned the city as a global leader in medical and pharmaceutical advancements.

Artificial intelligence and machine learning are also thriving industries, with major players such as DeepMind, Arm Holdings, Darktrace, and Luminance leading AI-driven innovation. The city is also home to pioneering research and development cybersecurity and data science, attracting top talent and investment from around the world. The semiconductor and computing sector has long been integral to Cambridge’s success, with Arm Holdings at the forefront of global chip design, alongside other notable firms such as Raspberry Pi and PragmatIC. The city’s expertise in hardware and software integration continues to fuel its influence on the global tech landscape.

Quantum computing is another area where Cambridge is making significant strides, with companies such as Quantinuum, Nu Quantum, and Riverlane spearheading advancements in this revolutionary technology. As quantum research moves from theory to commercial application, Cambridge is set to play a major role in shaping the future of computing. Meanwhile, the cleantech and sustainability sector is gaining momentum, with startups such as Xampla and Nyobolt developing innovative solutions in sustainable materials, battery technology, and carbon reduction. With such a diverse and dynamic technology ecosystem, Cambridge remains at the cutting edge of global innovation.

What draws tech companies to Cambridge?

Cambridge continues to attract technology companies due to its unique combination of academic excellence, skilled talent, and a thriving investment ecosystem. The presence of world-class research institutions, including the University of Cambridge, the Wellcome Genome Campus, and the Babraham Research Campus, fosters collaboration between academia and industry, creating an environment where innovation flourishes. Companies benefit from access to cutting-edge discoveries and a highly skilled workforce in fields such as artificial intelligence, life sciences, and engineering.

Paul comments, “Cambridge offers an unparalleled ecosystem where research, talent, and investment come together. Businesses here are not just developing technology – they are shaping the future on a global scale.”

A strong investment landscape further enhances Cambridge’s status, with a high concentration of venture capital firms, corporate investors, and angel networks providing crucial support for startups and scaleups. Its proximity to London and excellent transport links also make it an attractive base for companies looking to expand internationally. With these advantages, Cambridge remains a premier destination for technology businesses seeking to thrive in a world-class innovation hub.

What challenges are tech companies currently facing in Cambridge?

Despite its many advantages, Cambridge faces several challenges that could impact its continued growth as a technology hub. One of the most pressing issues is the city’s infrastructure and space constraints. The demand for office and lab space is high, driving up costs and limiting expansion opportunities for businesses looking to scale. With a finite amount of available commercial real estate, companies often face difficulties securing the physical resources needed to accommodate growth.

The rising cost of living in Cambridge is another concern, as it remains one of the most expensive cities in the UK outside London. High housing costs and living expenses can make it challenging for companies to attract and retain top talent, particularly for early-stage startups that may struggle to offer competitive salaries. Additionally, Cambridge competes with London, Oxford, and other international tech hubs for highly skilled professionals, leading to intense competition for talent in key sectors such as AI, life sciences, and semiconductors.

Scaling challenges for startups also present a hurdle, as Cambridge has excelled at fostering early-stage innovation but faces difficulties in supporting later-stage companies seeking to expand globally. While access to seed and early-stage funding is strong, many businesses encounter barriers when looking for larger-scale investment to drive international growth. Addressing these challenges will be key to ensuring that Cambridge continues to thrive as a leading technology ecosystem.

What’s next for Cambridge?

Cambridge’s future remains bright, with several major developments set to strengthen its position as a global technology powerhouse. The continued expansion of the life sciences sector, driven by investment in the Cambridge Biomedical Campus, Wellcome Genome Campus, and Babraham Research Campus, will solidify the city’s leadership in biotech and healthcare innovation. As the demand for medical breakthroughs and advanced therapeutics grows, Cambridge is expected to play a pivotal role in shaping the future of global healthcare.

The Cambridge-Oxford Arc, a government-backed initiative, aims to connect the two cities through improved infrastructure, fostering collaboration and economic growth. The region is set to become a leading innovation corridor, boosting advancements in AI, quantum computing, and more. Sustainability and cleantech innovation are also set to become increasingly prominent, as Cambridge-based startups work on breakthrough technologies in alternative energy, carbon capture, and sustainable materials.

"Cambridge has all the ingredients of a world-leading innovation ecosystem," says Paul Hughes. “With strong research capabilities, talent, and investment, Cambridge is set to remain one of the UK’s most dynamic tech hubs for years to come.”

"Cambridge has a mature and unique innovation ecosystem with a track record in making ground-breaking discoveries and translating them into world-changing businesses. Cambridge is the fastest-growing city in the UK and has been named in the Global Innovation Index as the most intensive science and technological cluster in the world for three consecutive years."

Kathryn Chapman, Innovate Cambridge, Executive Director

7. The Central South

Alex Stansbury, Director and Matthew Carter, Director

What’s the lowdown?

The Central South of England is solidifying its status as a critical player in the UK’s tech landscape. Historically known for its strengths in sectors like aerospace, engineering, and software development, this region has evolved into a thriving hub for small-to-medium enterprises (SMEs) and start-ups. Southampton, Bournemouth, and Poole continue to draw attention for their growing contributions to the tech ecosystem.

“Southampton remains one of the top five super clusters for medium-sized tech businesses,” says Matthew Carter, Director at BDO Southampton. “This is a significant achievement, especially when you consider that the region is competing with heavyweights like Oxford and Bristol.”

While the region might not immediately spring to mind as a tech epicentre, it has consistently proven itself to be a fertile ground for innovation and growth. The presence of major players such as IBM, Ordnance Survey, and Starling Bank further cements its reputation as a vibrant tech hub. The University of Southampton meanwhile plays a pivotal role in nurturing early-stage tech ventures, contributing to a robust start-up ecosystem that promises continued innovation.

What industries and sectors are drawn to the Central South tech hub?

Household names like IBM, JP Morgan, Siemens, Sony, Garmin and Ordnance Survey have long-established roots in the Central South region, and fintech giant Starling Bank continues to expand its influence since opening an office in Southampton in 2019. Driven by its coastal proximity, the marine tech industry is rapidly advancing with developments like AI-driven autonomous shipping set to make a name for the region.

The gaming and creative sectors are strongly represented, with companies in the area providing services for major brands such as Google, Mattel, Microsoft Studios and Nickelodeon. On top of this, several emerging sectors are establishing themselves in the region. “As sponsors of the South Coast Tech Awards, we have a front-row seat to the incredible innovation happening across the region,” says Alex Stansbury, Partner at BDO Southampton. “The event showcases the best in tech, and it’s always inspiring to see the diversity of companies choosing to grow here. Most recently, we’ve seen emerging sectors like deep tech, healthtech, and eco-environmental technology gaining traction. I’ll definitely be keeping an eye on how those develop in the coming years.”

Why start a tech company in the Central South?

The Central South is brimming with opportunities for tech, thanks in large to the support infrastructure in place. The University of Southampton Science Park, for example, offers fully funded support and mentoring through its Catalyst programme, targeting entrepreneurial ventures in early-stage science and technology. This, coupled with the SETsquared Partnership’s Business Growth Programme, provides a solid foundation for start-ups and SMEs looking to scale rapidly and sustainably.

“There's a real sense of community among tech businesses here,” says Stansbury. “Events like VentureFest South are great for networking and showcasing the latest tech innovations. There’s always fresh inspiration to be gained.”

Moreover, the recent announcement of a multi-million pound Landmark R&D Facility in Southampton is set to further boost the start-up ecosystem, ensuring a steady pipeline of innovation. Subject to the granting of planning permission, the research and development facility is projected to be ready for occupation as early as 2026.

The Solent Freeport is another potential game-changer for the region, as laid out in the Solent 2050 strategy.

“In 2021, the Solent was granted freeport status,” Stansbury explains. “Also called free-trade zones, freeports are designated areas where the normal tax and tariff rules of the country do not apply. In theory, the freeport has potential to bring thousands of jobs to the region. The impact has been limited to-date, but it’s still early days – so watch this space.”

What challenges are tech companies currently facing in the Central South?

Despite the many strengths of the Central South, the region does face certain challenges. Access to talent is a common concern, as reflected elsewhere in the country. This is part due to a lack of new talent being produced by UK universities, while stricter visa regulations have made it more difficult to attract talent from overseas, exacerbating the issue.

“Finding the right talent is becoming increasingly challenging,” says Carter. “We need more initiatives to retain graduates and make it easier for skilled workers from other regions and countries to fill the gaps.” Funding also remains a hurdle, particularly for businesses looking to scale up. Although the region has a strong start-up environment, many promising companies are being acquired by larger firms, often from overseas, rather than growing independently.

“There’s no shortage of innovation here,” says Stansbury. “But securing the necessary funding to take that innovation to the next level can still be a bit of a struggle. The venture capital landscape is not as developed as in regions like London or the Thames Valley, but we have high hopes for the future.”

What's next?

Looking ahead, the Central South is poised for continued growth. The anticipated benefits of the Solent Freeport, along with Southampton’s promised Landmark R&D facility paint an exciting future for the Central South as a rising tech hotspot.

There’s also hope that the change in government could bring policies more focused on devolution, which could lead to more localised control and investment in the region.

“The next few years will be crucial,” says Stansbury. “We need to focus on improving the infrastructure around scale-ups and ensuring that the region can support businesses through every stage of their growth journey.

“It’s an exciting time,” Carter adds. “And I can only see the Central South growing more prominent as all these pipeline initiatives fall into place.”

8. Leeds

Mark Langford, BDO Audit Partner; Laura Burton, BDO Director; Gareth Jones, BDO Partner

What’s the lowdown?

Leeds continues to strengthen its position as a leading tech hub, growing 125% faster than the national average, with an annual growth rate of 3.6% compared to 1.6%. The city’s fintech sector has more than doubled in size since 2020, now contributing over £700 million annually to the regional economy. The number of fintech startups and scaleups in the region has also surged by 263% since 2020, with more than 100 fintech firms now operating in the area.

Gareth Jones, Partner at BDO Leeds, notes that the city’s tech landscape continues to flourish with robust activity across the region. “Leeds has a dynamic, evolving tech sector, driven by strong investment, a skilled talent pool, and a supportive infrastructure,” says Gareth. “With continued expansion across fintech, software development, and data-driven industries, the city is set to remain a key destination for tech innovation.”

What are the key industries and sectors in Leeds?

Leeds is home to diverse tech companies, from healthcare and space tech to FinTech and consulting agencies. EMIS Group, a major NHS digital services provider, reported a 6% revenue rise to £168m in 2021, drawing acquisition interest from Bordeaux UK Holdings II Limited, affiliated with Optum Health Solutions. Bruntwood SciTech’s Platform hub in Leeds hosts more than 80 startups, fostering innovation within the city.

Leeds also houses industry giants like Channel 4 and Sky Betting & Gaming. “Sky’s move here was pivotal in establishing Leeds as a digital city,” says Mark Langford, Audit Partner at BDO Leeds. “It’s helped create a space where giants of the tech world can inspire and collaborate with the city’s start-up scene, creating a community atmosphere that drives everyone forward.”

What draws tech companies to the Leeds area?

Leeds offers a vibrant ecosystem driven by its nine universities, which produce 39,000 graduates annually. Leeds University’s Nexus Connect is a networking event that facilitates connections among tech innovators, drawing companies seeking fresh talent. Diversity and inclusion remain key, with robust representation of female tech leaders and dedicated support for women entering or advancing in the tech sector.

There are also a number of key festivals in the region. Leeds Digital Festival (LDF) has held over 200 events since 2016 covering AI, cybersecurity, and more. LDF's community-driven approach offers free events to help boost tech upskilling across the region. Climb24, now in its second year, is another exciting event, designed to encourage innovation and investment by drawing active investors to the region.

In addition, the region boasts affordable office space and cost-effective living, making it an increasingly attractive destination for tech firms.

“Historically, many thought London was essential for tech, but that’s no longer the case,” notes Laura Jones, BDO Director. “Leeds continues to gather momentum, and we’re seeing significant interest from companies and talent who previously wouldn’t have considered anywhere outside the capital. The city’s tech scene has evolved into a destination of choice, not just for startups but also for established tech companies, global consultancies, and even niche sectors like healthtech and space tech.”

What challenges are tech companies currently facing in Leeds?

Despite its successes, Leeds' tech ecosystem continues to face various challenges. Access to funding, especially in the early stages, remains a significant hurdle for many startups. Additionally, attracting and retaining top talent is a persistent issue across the UK tech sector, as the demand for skilled professionals often surpasses the supply. Initiatives such as the Barclays Eagle Labs Ecosystem Partnership programme, are actively empowering local organisations to disrupt this trend.

That said, these challenges also present opportunities. Leeds' growing recognition as a tech hub continues to attract an increasing number of investors and talented professionals to the city. Furthermore, initiatives like the Northern Powerhouse, which aims to boost economic growth in the North through better transport, education and business development, are likely to enhance the city's appeal.

What’s next for Leeds’ tech hub?

Leeds’ tech ecosystem is poised for further expansion, supported by initiatives like AD:VENTURE, which offers early-stage businesses advice and financial support. The local government led Business and IP Centre Leeds provides valuable resources on intellectual property and market research, enhancing the city’s capacity to foster innovation.

New initiatives targeting underrepresented groups and supporting female founders are also gaining traction, with Bruntwood’s Female Founders Incubator empowering women entrepreneurs and supporting startup founders.

Overall, Leeds’ tech sector, with its collaborative approach and expanding infrastructure, is set to remain one of the UK’s leading digital hubs, creating more opportunities and attracting a diverse range of talent and investment in the coming years.Gareth Jones

Man with laptop

Stay Ahead in TMT

Get industry updates straight to your inbox, subscribe to our TMT newsletter.
Subscribe now

Related Insights