2019 - the tipping point for the West Midlands tech cluster?

So the Christmas decorations are packed away, the last mince pie has been left in the back of the cupboard to be forgotten about until Easter, and social media is full of articles telling us what is going to happen in 2019. As we live in a world where the trees won’t be wasted by me adding to that tomb of unchecked literature I thought I’d put down what I think 2019 will have in store for the Midlands tech sector.

I am a massive believer in the regional digital cluster having seen first-hand over the past 18 months entrepreneurs, companies and activities that are breaking new ground, competing on a world stage and generally being as good as anything I have seen in London, Europe or further afield.

Early stage deal activity is being supported by the (eventual) operation of the Midlands Engine Investment Fund with a number of seed stage companies breaking new ground in the region. Anecdotally, at least until the numbers get issued, later stage deal levels while down, are being transacted at good valuations, providing growth and exit capital into the sector.

With the announcement on 5G and the opportunities that brings to accelerate the building of a global innovation cluster based on a new and transformative technology, the region is well positioned to have a storming 2019.

And normally that is where I would leave my thoughts - upbeat and positive about a region I care deeply about and that has a lot going for it.

But not this year.

If commentators can agree on one thing about 2019 it is that we are in for a turbulent ride. Brexit, economic turmoil and political upheaval are on the horizon and now is not the time to rest on laurels and self-congratulatory messages of how well we have done. It is also not a year to lose sight of the fact we are not operating in isolation; other clusters both nationally and internationally are growing, evolving and competing for talent, investment and airtime with similar vigour.

So, if I was to write a more realistic (?) view of the outlook for 2019 what would it include? What would be on my wishlist of things we need to achieve as a region in 2019? What do we need to do in order to achieve what Malcolm Gladwell outlines as the "the tipping point...that magic moment when an idea, trend, or social behaviour crosses a threshold, tips, and spreads like wildfire.”

What will make the WM spread like wildfire through the global tech sector?

Tell our story

Across the region, we have companies, individuals and ideas with the ability to be truly transformational. Yet when you are talking to the tech community in London or further afield there is still a lack of understanding about the capability and successes in the region.

In 2019 we must understand that in a global tech market those with busy schedules and the ability to deploy capital and talent anywhere in the world will not just come calling because they have a spare couple of days to go wandering. We must curate a compelling story of our region and proactively take it to them. Repeatedly and with vigour. We must give them a reason to stop off and see what is going on.

Region vs local; origination vs closing

As part of this storytelling we must also understand when we must act as a regional body vs local ecosystems. To use sales terminology we must originate as a region, and close as local or segment specific clusters. We are much more likely to attract money, inward investment and scale-up companies when we act as a regional body. As a region we can showcase the breadth of talent and expertise we have, the scale of the cluster and the successes we have already created. We are much more likely to hit the market of inward investors if we broaden our appeal with a regional viewpoint. Once we have piqued their interest that is when the subject matter experts in specific clusters can take over, showcasing our deep expertise in specific segments and addressing their specific requirements.

The L word

And while we are at it - we also need to get comfortable with our relationship with London. Whether you like it or not it one of a handful of global tech cities and it is on our doorstep.

It is home to investors, global corporates looking for innovation and scale-up companies looking to expand. If 2019 must bring one thing is the need to use this asset to our advantage. We must understand indigenous West Midlands companies can be HQ'd in Bromsgrove but still be active in London and that they are not going to have their head turned by the bright lights of the capital and up sticks to EC1. Similarly, we have a compelling proposition for those companies built in the capital who are looking to expand. We have the talent, space and ambitions to fuel their growth, providing benefits to UK plc while also bolstering our region with opportunities and profile.

If you don't like the music

With the stream of year-end statistics issued in the tech sector I was struck by the disconnect between what is happening on the ground and our regional position in various league tables. For good reasons (ahem...) the tech sector is fascinated with stats focused on the amount of capital raised and the valuations raised. This is doing us no favours. As a region, through necessity and culture, we have a predisposition for building companies that do not require large amounts of early-stage capital. Whether that limits their scale is a debate for another day but it undoubtedly means we are pushed down the league tables and it is time we changed the record. 2019 should see us focus on telling our story based on the number of jobs created, customers won, international expansion and (whisper it) revenue and profits.

Building a regional connective tissue

If there is one thing I hope we can build in 2019 is an ability to cross segment, geographic and organisational boundaries for the benefit of wider regional growth. Too many of the goals we need to achieve are not the sole remit of a single organisation or geography. 2019 must be the year where individuals and organisations are confident enough in their own positions and capabilities to give up power and control of activities that are either not in their core remit or which they cannot deliver to a world-class level. Our ability to convene and collate our regional capability across boundaries will be key to our success.

#nowisourtime

2019 will be a fascinating year on a regional, national and global basis.

If we come together, passionately articulate our regional strengths and understand we are competing on a world stage it will be the year that the world realises our historic strengths have been building an iceberg-like tech and digital sector of talent, capacity, success and entrepreneurial spirit that has, to date, only been partially exposed.

Get in touch

In the spirit of bringing the region together (most likely in their disagreement with my sentiments!) please feel free to get in touch in the comments sections or via messaging me.