Learning from Leeds: How this Yorkshire city created the UK’s fastest-growing digital economy

Read time: 6 mins    |    Added date: 07/12/2023

This year’s Leeds Digital Festival was a showcase for the city that has established itself as a nationally and internationally important technology centre.

Leeds boasts the fastest-growing digital economy in the UK – worth £6.5 billion every year – and attracts big names like Sky, Channel 4 and NHS Digital, as well as innovative startups and scaleups which bring in hundreds of millions in investment.

But what is Leeds doing so right and what can other towns and cities learn from its success?

A summit of the city’s tech sector leaders, convened by Lloyds Bank as part of the Festival, highlighted four factors driving Leeds’ ascent.

Community

One aspect of working in Leeds that all the leaders were keen to emphasise was the sense of community, where even rivals will go out of their way to support each other, because they understand that what’s good for the city is good for them all.

Liz Whitefield, Director of full-service digital consultancy Hippo Digital, said: “There's something about the way the community comes together here that I've never seen anywhere else. It's a shared mission.

“We compete against each other, but we also partner and collaborate.”

It’s telling that there are more than 70 tech sector networks – some formal, some less so – that regularly meet across the city to share their insights and experiences.

The panel suggested that the tech sector’s compact size has helped foster these productive relationships.

Many of the city’s technology professionals had worked in many different enterprises through their careers and had formed good relationships with colleagues as they moved across businesses, so had a large circle of friends in the industry.

That fosters a culture of collaboration, which in turn is attracting increasingly large brands to Leeds.

Alex Craven, Co-Founder of data-as-a-service company, The Data City, said the city’s supportive ethos helped startups to take the next step: “Entrepreneurs need access to networks, but it takes a long time to build these.

“One of the key things we, as established firms, can do to support entrepreneurs is invite them into our networks and introduce them to people that might be able to help with tailored advice or access to finance, for example.”

It seems that there is an opportunity for other cities or sectors to establish collaborative networks like those seen in Leeds, but individuals must also be open with their advice and generous with their time.

“One of the key things we, as established firms, can do to support entrepreneurs is invite them into our networks and introduce them to people that might be able to help with tailored advice or access to finance, for example.”

Alex Craven – Co-Founder of The Data City

Diversity

Diversity and inclusion remain a challenge for the UK tech sector: just 28 per cent of tech workers are gender minorities and only 25 per cent are from ethnic minorities, while just 27 per cent of equity investments went to startups with a female founder.

But in Leeds, there’s a strong perception that diversity is something that comes naturally.

Steve Harris, Lloyds Bank’s Leeds-based UK Head of Tech, said: “There’s a values-based approach that runs deep in the Leeds business community. That then becomes self-fulfilling, because you've got lots of diverse role models who are very vocal about promoting an inclusive tech sector.”

But panellists were quick to highlight ways of improving diversity even further, particularly in creating opportunities for people from different socioeconomic groups.

People growing up in poorer communities might not have the most up-to-date tech at home, for example, so the idea that they can have a career in digital may seem unattainable and unrelated to their life experience. The panel all agreed that outreach has an important role to play to help change these perceptions.

Charlotte Bailey, COO of business analytics solutions provider Paninteligence, also spoke about the importance of engaging young women with STEM subjects, a topic that was explored further at a gathering of female tech founders during the Festival.

The panel concluded that while ensuring diversity can open up more opportunities for individuals, as well as build a skills pipeline, it must be a sincere ambition and not a box-ticking exercise.

 

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Leadership

While the panellists were keen to paint Leeds as a supportive community of self-starters, they were also quick to recognise the importance of good leadership, which comes in many forms.

Sarah Tulip was happy to pay tribute to the influence of Tom Riordan, who has been Chief Executive of Leeds City Council since 2010, and in particular, his focus on diversity.

Eve Roodhouse, Chief Officer, Culture and Economy at Leeds City Council, also emphasised the importance of stable, consistent leadership: “Over time, we've been able to think really carefully about how we're developing the city. It takes a long time to plan and work with the property sector to bring forward the right kind of development, but now you can see things like the creation of the largest new city centre park in Europe on the South Bank. That shows that we’re an ambitious, bold city, and the digital sector is an important part of our focus – not just because digital now underpins the economy, but also because we see it creating great opportunities for people.”

It’s vital that leaders recognise the transformative potential of tech to enhance an area’s economy and work with all stakeholders to create strong and sustainable ecosystems.

Confidence

Joe Roche, Engagement Manager at events-based FinTech community platform Fintech North, has been working to promote Leeds businesses to investors in London, which still attracts a disproportionate amount of UK fintech investment. But he says firms in Leeds don’t feel they have anything to prove when they go head-to-head with firms in the capital, or anywhere else.

Joe said: “What sets Leeds apart is resilience. It's hard to scale a fintech business outside of London – there are real challenges with fundraising, for example – so the businesses that become successful have the confidence that comes with having overcome so many hurdles.

“The fintech sector in the Leeds city region has doubled in size over the last three years, and when you think about what's been going during that time, that's absolutely astounding. It’s brilliant to be able to showcase that.”

Stuart Clarke, Director of Leeds Digital Festival, says the city is now attracting outside attention for all the right reasons.

He said: “There’s been a big change over the last few years. Because of all the noise that we're making, we can't be ignored.”

Steve Harris returned to the theme of community, which he believes will help perpetuate Leeds’ prosperity: “Confidence underpins everything, and a lot of that comes from knowing that there’s a community ready to work with you and support you. That gives people the confidence to start and grow a business.”

There’s no doubt that Leeds was always well-placed to become a tech hub, not least because of its existing status as a centre for financial services, its universities and its history of innovation.

But the city’s success also reflects a culture of positivity, partnership and practical support that seems to come naturally to the area’s entrepreneurs.

This shared ambition to uplift each other can be an inspiration to all.

 

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