Why Manchester is the next Silicon Valley
The UK city of Manchester is world famous. This historic location played a key role during the Industrial Revolution, whilst in more recent times it has been the birthplace of many beloved bands, as well as playing host to one of the biggest and best football teams in the world.
Looking to the future, Manchester’s prospects are showing great promise, as a number of growing industries position themselves in the heart of this cultural city. The ever-evolving tech space is expanding and just as Silicon Valley is blazing a technology trail in the US, the UK is developing its own exciting tech centre in the north.
There has been much discussion about the opportunities that Manchester can and could offer the tech and digital industries. Read on to discover what factors are leading Manchester to become the next Silicon Valley and what opportunities this could bring to the city’s economy as a whole.
What exactly is Silicon Valley?
Silicon Valley is a specific region situated in San Francisco, California. Its name comes from the silicon used in computer chips, as the area was once populated by companies who produced and evolved these chips.
Over the years, however, this area has piqued the interest of many tech businesses, namely global corporations such as Apple, Google and HP. The area is now largely dominated by these tech giants and have driven economy growth in the area.
Silicon Valley is now the largest area for tech manufacturing, compared to anywhere else in the US. Its development has introduced hundreds of thousands of jobs to the country, along with the average annual earnings being estimated at $125,580 in 2016. With this huge demand to live, work and run a tech business in the area, property prices have soared and the need for further development grows.
Silicon Valley plays an important role in the US economy, as it produces more employment opportunities than anywhere else in the US and with this, comes a fantastic opportunity to develop the area as a whole.
Manchester’s boom labels the city as the next Silicon Valley
The city of Manchester is currently experiencing huge growth, with its popularity amongst tech and digital businesses being a large contributing factor. It has quickly become the most dominant city outside of London for these industries, with no sign of slowing. Lower operating costs and a much lower overall cost of living, are driving businesses away from the capital and towards this northern city.
In fact, Manchester’s popularity has sparked the introduction of the term, north-shoring, which describes the process of smaller tech and digital businesses making the move from London to Manchester. Of course, Manchester has plenty more to offer these businesses than just a lower cost of operating and living. Manchester offers the ideal lifestyle for these business owners and their teams, too.
Let's examine the factors behind the northern city's burgeoning boom:
1. A large and growing network of likeminded people
North-shoring means that the city is buzzing with thousands of professionals within the tech and digital space. Whether new businesses are looking for a mentor to guide them towards further growth, or searching on the other end of the spectrum for juniors to join their team, they can be sure to find the right person for their business in Manchester.
There’s also a number of dedicated tech networks, including Tech North and MadLab, who focus on supporting local tech and digital businesses during their startup and scale up journey.
2. One of the best business schools in the country
Manchester has one of the largest student populations across the country, with the University of Manchester, the University of Salford and Manchester Metropolitan University (MMU) each drawing students to the city every year.
Not only that, but MMU is also home to one of the biggest and best business schools in the country. The MMU business school has recognised the growing tech and digital presence throughout the city, so much so that it now offers a number of courses that focus on developing key skills to succeed in these industries.
It’s this offering that is providing Manchester with a wealth of young professionals ready to kickstart their careers within the many tech and digital businesses located there. As such, tech business owners considering a move to Manchester can feel secure knowing that there is a pool of talent that can help to develop their business.
3. Local startup incentives and initiatives
Government officials too have big hopes and plans for Manchester’s future in tech, with George Osborne dedicating over £4 million in his 2015 Budget to developing a large digital hub in Manchester. Since then, the local council has gathered to discuss the upcoming “Project Forward”, that focuses on fulfilling Manchester’s tech potential, with plans to develop over 70,000 square feet of dedicated tech space in the city.
Not only that, Manchester holds one of the lowest corporate income tax rates of anywhere in the world at 20 percent, so businesses can expect their operation costs to be much lower by simply relocating to Manchester.
There’s also a number of initiatives set up in Manchester, aimed to help startup businesses succeed. Enterprise zones have been developed in order to help businesses grow, and businesses situated within these zones have access to discounted rates for five years.
What’s in store for the UK’s Silicon Valley?
We’ve established exactly what has and is being done in Manchester, that’s driving tech and digital businesses to the city. With its popularity amongst these businesses, there are now over 52,000 industry professionals working in the city, who together, are driving a £2.9 billion digital turnover.
To continue growing and developing its status as the UK’s Silicon Valley, Manchester needs to develop as a city, in order to cater to these demands.
Property investment is rising
With the growing trend of tech businesses moving to the city, the number of office space enquiries from this sector has increased. In fact, findings from Colliers International discovered that 40 percent of office space enquiries have been coming from businesses within the tech space.
To cater for this demand, the development of both office space and residential property has increased. Brand new areas within the city are being introduced, including Middlewood Locks, along with a further expansion of MediaCity, for example. Each of these developments intend to increase the number of residential properties and office space available in Manchester.
It’s expected that the cost of buying or renting property in Manchester will rise over time, as developers and investors recognise the demand for these high-quality spaces. In the years ahead, investors will be looking for a large return on their property investment in Manchester. The tech industry is driven by youth, and as Manchester's cachet as a global tech hub grows, young professionals will flood into the city, looking for high-quality rental options, which means buy-to-let property in Manchester should be on every investor's radar.
A look at the investment in Manchester’s transport networks
Manchester’s growing popularity means that transport networks need to be improved, to cater for businesses and individuals making the move to the city. With the development of transport systems comes further investment, as well as further increases in property prices, too.
Transport for Greater Manchester (TFGM) has recognised the growth of the local economy and looking towards the future, has plans in place for local transport systems up to the year 2040! A huge factor for TFGM is tackling the congestion that is bound to increase over the years, as Manchester’s popularity continues to grow.
There’s also the momentous project of HS2 in place, a high-speed rail network that aims to reduce the commute time between major UK cities, including the journeys from London and Birmingham to Manchester. Work towards connecting these southern cities with Manchester is expected to begin around 2025 and will be completed by 2033. This huge investment in the country’s commuting time will enable Manchester businesses to develop new and existing relationships with other businesses across the country, with ease.
Looking further afield, improvements to Manchester Airport aim to streamline journeys from the northern city to global destinations. One improvement that will greatly benefit Manchester’s tech businesses, is the newly introduced “Man-Fran” direct route from Manchester to San Francisco with Virgin Atlantic.
The airline has recognised the need for the upcoming tech space of Manchester to be connected with the huge US tech region, Silicon Valley. An 11-hour flight now provides these businesses with a simple and convenient way of building relationships with tech businesses overseas. It also presents the opportunity of expanding their business on an international level.
Other improvements to the airport include a £1bn improvement project on terminal 2, aimed to increase the number of routes on offer, as well as reducing congestion both within the airport and along its access routes, all whilst improving passenger waiting times, too.
From the tech businesses themselves to the local council, property developers and those who invest in the completed projects, there’s an overwhelming buzz of excitement when it comes to the future of Manchester’s tech and digital space. Whether it will reach the scale of Silicon Valley still remains to be seen, however there’s a definite growth occurring and the future of Manchester shows great promise.