Bucking the Brexit Trend with Manchester Digitial

Manchester has a rich industrial, sporting and cultural heritage, and today is a C21st city with a thriving tech community seeking to compete with other major European centres with some unicorns and major players based here – Autotrader, Bet365, Sainsbury and Boohoo.com as examples. There’s a clutch of co-working spaces, incubator and accelerator programmes striving to create a cohesive startup ecosystem, and support groups like Manchester Digital and Tech North.

The birthplace of the modern computer, It’s always had a confident swagger, a self-belief and do-it-for-yourself attitude, and the growth is palpable, with over 80,000 employed in the combined tech and digital sector, making it second only to London for scale.  

It was against this backdrop that tsf.tech ventured out on a wet, drizzling Friday morning – ok, it was raining harder than when Noah set sail – as sponsor of Manchester Digital’s inaugural ‘Startup Stories’  event, hosted by the ebullient Richard Gregory of Tech North.

For a particularly soggy morning even by Manchester’s standards, there was an encouraging turnout for the panel discussion on “Bucking the Brexit trend”. It was the first outing of our new roller banner, which Ian managed to rescue after my failed attempt at putting it up (note to self, recall the boy scout motto: be prepared).

Richard drew the fray to order and in good time we were off. The discussion aimed to uncover the underlying issues and prevailing sentiment of how Brexit is affecting startups in Manchester. The cosmopolitan panel reflected the modern European centre Manchester has become, with three entrepreneurs having recently relocated to the City – Luka Nachbar Cvikl from Nuuk, Thibaut Poudou from Clickoo, Javier Re from Crowdar – and Martha Sama from MIDAS giving the inward investment perspective.

My only knowledge of the impact of Brexit on Manchester to date was the fact that adverse foreign exchange fluctuations meant an already over-priced Paul Pogba cost Manchester United £9m more in the summer, an adverse movement of 12% on post 23 June referendum transfer fee valuation, but I was hear to listen and learn from others’ startup experience.

Whether it was trying to get startups to move to Manchester or how different European cities such as Berlin and Paris were direct competition in terms of the funding they offer, or the availability of the right people to help startups succeed, all topics were on the table with few stones left unturned.

For me the discussion which I found most interesting was that of the skills gap. Whilst this is a well-aired topic, this is something we are currently experiencing ourselves as tsf.tech look to scale up our team, and I tell you it’s tough. Finding the right balance and combination of experience, attitude and skills can be difficult at the best of times, but with the reduction of migrants from Europe impacting the talent pool, this job is getting harder.

Much of the panel debate centred on whether the answer was found with university education and the courses offered, or was it through the upskilling of existing talent to become what a start up needs – whether that be ace digital marketers or developers with specific languages. Some were enjoying more successful recruitment than others, but with the emergence of some truly global players taking centre stage in the city, an answer is needed to keep startups in Manchester growing from a skills perspective.

The most interesting stories were those of the panelists all of whom had, even after Brexit, relocated to Manchester. Their stories showed the strength and ability for Manchester to both attract and develop startups from very different sectors and embrace them in the community of businesses that are thriving across a range of sectors.

Richard Gregory kept his balance admirably when extolling the virtues of all the Northern cities under his Tech North remit, reiterating the confidence we all felt that the building blocks are in place in Manchester in terms of shared co-working spaces and support groups, and it is the friendliness and openess of the Manchester tech community that will be a key weapon to respond to any emerging business threats from Brexit.

We live in Federation House, the Co-Op working space, where our startup innovators and collaborators huddle and cuddle against a backdrop of regeneraton of the historical early home of the industrial revolution. It’s a statement of confidence that ‘if you build it, they will come’, and it’s striking that there is energy, flair and confidence with the startups that Brexit, whatever your in-or-out view, won’t diminish.

There was some concern that the big companies searching for high numbers of tech talent would divert the skills away from startups as a non-Brexit challenge, but the panel and audience all believed Manchester was a natural place for startups.

The conversation moved to angel funding, and whilst most agreed there was a need for better access to local seed and startup funding, Manchester has a great challenger and can-do mentality as a city and shouldn’t develop an insular attitude to funding and feel sorry for itself. The discussion gave short shrift to London versus Manchester rivalry and the call to action was for Mancunian founders should be willing to get on a train and go down to London to meet investors and bring the cash back North. In this regard, Brexit was a UK wide challenge, and feeling sorry for ourselves just wouldn’t help.

The consensus was the tech culture of Manchester is emerging with a clear identity, and growing fast, and that there is no better place than the city for creativity and energy. Whilst money is available and with NPIF and others offering opportunity as such isn’t in short supply, but the visibility of it probably is. That’s our experience for sure with pre-revenue startups, there needs to be a clear ladder of investment money, that can be accessed at different stages from angels, to venture capital to private equity. We need all of those, and again this isn’t a Brexit specific issue.

The EU referendum is proving to be a hugely divisive topic with opinions split between leaving and staying. The far-reaching consequences of Brexit will be felt throughout almost every aspect of life from house prices to immigration policies, but judging by the sentiment from the attendees at this event, currently there remains a robust confidence in the Manchester tech economy with a determination that growth and prosperity will be maintained.

Whilst there is uncertainty of the future free movement of labour between the UK and other EU member states, perhaps the most damaging effect of Brexit would be the loss of EU funding supporting innovation. Closing the door on access to these funding streams would have a very negative impact on innovation UK wide. The knock-on effect of an exit could be dramatic in this regard, not least the uncertainty it has created.

The meeting closed with a feeling of steely confidence, that whilst the UK is the first-ever country to leave the EU, and we have no blueprint to base it on, if we are going on hope and nostalgia alone, it won’t be enough. It is almost impossible to predict exactly what will happen as a result of Brexit, but we have to do it for ourselves, reflecting what  the late Tony Wilson once said, This is Manchester, we do things differently here.

Manchester has been a fulcrum of change that can claim to genuinely have changed the world, from vegetarianism to feminism to trade unionism to communism, always brimming with upstart notions and ideas above its station, a street-fighter brimming with radical philosophies and musicians with outrageous talent and attitude, confidence and swagger fostered brawling in Manchester’s streets, mills, pubs, churches and debating halls. Brexit won’t stop us for sure. This is the place, after all.

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