Region in focus: The South
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Proving to be a significant challenger to the London market, the South – comprising Southampton, Bournemouth, Sussex and Surrey regions - is a tech hub with a significant talent pool for business success.
This region in focus on the South has been compiled with expert input from:
Nick Poulter, Local Head of Audit, BDO South East
Nick is the Local Head of audit for BDO South East. He has several years’ assurance and advisory experience and specialises in advising technology companies. The types of technology companies that Nick typically advises include software companies, managed services providers and enhanced engineering companies. Based in Guildford, Nick primarily works with companies in the Surrey area.
Jane Mulholland, Local Head of Tax, BDO Southampton
Jane is the Local Head of Tax in the Southampton Office with overall responsibility for the delivery of taxation services to their clients. Jane has over 25 years’ experience of working with a broad spectrum of businesses, including listed PLCs, inbounds, PE/VC backed and privately owned companies. She advises on all areas of corporate tax including international group structuring, mergers and acquisitions, tax accounting, R&D tax credits, listings and due diligence.
What’s the tech-business landscape like here?
One of the main draws of Surrey and the wider southern area is the fantastic local niversity of Surrey which has a strong STEM programme, and provides a steady flow of talent ready for the tech world of work. It forms part of the SETsquared Partnership - usually referred to as SETsquared – which is a tech business incubator network supported by five universities across the south of England. The organisation has worked out how best to transform academic excellence into commercial application, with entrepreneurs in residence and incubation units in the Surrey Research Park. This provides a well-supported framework to take the academic into the entrepreneurial, helping tech businesses to spark into life.
"One of the interesting sectors that is dominant in the Surrey marketplace is video game technology. There are a lot of tech companies operating in the area, including big names such as EA Sports."
Quite often, we see businesses which have come through more formal roots that then splinter into offshoot studios.
Similarly, in Southampton, the SETsquared arrangement with the University of Southampton and the Southampton Science Park helps to generate innovation and provide a strong talent pool. Other incubators in the area include the Surrey Research Park, which provides office space for smaller start-ups and support for businesses in the area, and the Future Worlds start-up incubator from the University of Southampton.
Southampton has a lot of tech firms that deal in software for manufacturing, offering tech that can be combined for multipurpose solutions, rather than a specific focus on one sector, such as life sciences. The area is diverse, which is helpful for the local region to thrive no matter what is popular at one time.
Bournemouth is now recognised as one of the UK’s leading tech hubs. This is helping to ensure that an area perhaps better known for people of a certain age, is now focused on attracting tech and younger talent for future prosperity. FinTech companies are well represented in the area, with loan-based technology and software being a focus.
For incubation for Bournemouth-based businesses, there are companies such as the Richmond Group, which supports technology through office space provision and support for start-up and scale-up businesses in their early stages, particularly in the Ed Tech, Fin Tech and Prop Tech arena.
What’s the funding and investment landscape like?
In the past few years, there has been lot of investment capital available for tech in the south of England, particularly with private equity funds that have a stated ambition to invest in technology companies. The flow of high-quality companies coming into the market is strong, making the market quite competitive. There are definite opportunities for tech businesses that have a technical proof of concept, which helps them garner the interest of venture capital firms. These businesses are often funded initially by higher net worth incubator funds, or have the support of high net worth individuals with specific interests in particular technology, such as green tech. The funding landscape is far more uncertain in the current environment due to the large scale uncertainty created by the coronavirus pandemic and only time will tell what the longer term impact will be on the region.
What particular benefits does the region offer to tech businesses?
The south of England’s main attraction are the local universities’ talent and connections, and the existing support for businesses in the area. There’s a strong sense of community surrounding all these hubs, which helps to alleviate issues businesses may face when starting or scaling up. With SETsquared, for example, they assist businesses with accessing government grants and writing proposals for accessing grant funding.
Companies are also very aware of the need to retain talent, rather than just attract it – in the local market in Surrey, for example, there is a huge effort being made by companies to make it a desirable place to stay. Salaries won’t always be as competitive as London, which creates the risk of ‘brain drain’ from the southern area, but the local environment does offer better quality and lower cost of living that helps to attract and keep talent. There is a greater focus on the work-life balance for employees, and for creating specialised hubs that will attract new employees with particular skills.
What about the future?
"The southern area of England is quickly becoming home to a range of specialised hubs. This attracts companies either starting out in tech or moving into tech - manufacturing businesses, for example, are increasingly desiring to move specifically into tech. "
The future is in technologically-advanced ideas, and investors are realising that the technology sector provides great opportunities to support the big ideas of the future.
Get in touch
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