Leeds HS2 blow will not derail North’s tech sector – Hugh Campbell

NEWS that the eastern branch of HS2 is to be abandoned has dealt a sizable blow to the commitment to levelling up the North. 

How will the decision not to go ahead with the eastern leg of HS2 hit the Leeds economy?

The infrastructure that had been promised is of paramount importance to progressing the growth of the digital economy across the UK – the projected London-Leeds branch would have supported 160,000 new jobs, and was estimated to bring a £200bn uplift to the UK economy.

For some time, London has been the epicentre of the high growth tech companies and an investment magnet. But in recent years we’ve seen the Northern tech sector deservedly entering the conversation as a dominant region in this field.

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When you take a closer look at the tech ecosystem of Leeds for example – the city is integral to the wider UK tech scene. It’s the healthtech capital of the UK and is proudly home to NHS Digital. 

How will the decision not to go ahead with the eastern leg of HS2 hit the Leeds economy?

It’s certainly true that the rewards of an improved transport network for the Northern tech ecosystem cannot be disregarded.

It was estimated that this branch of the line would have reduced the journey time between Leeds and London by 38 per cent. This decrease in journey time would arguably be the difference between a comfortable commute and an untenable one.

The seeds of a Northern tech powerhouse have already been sown – and HS2 had the potential to provide an infrastructure boost we needed to truly cultivate the foundations that have been established here. 

This may be a setback for Yorkshire, but I’m confident that the resilience of the tech sector in the region will stand firm in the face of it.

How will Boris Johnson's decision not to go ahead with the eastern leg of HS2 hit the Leeds economy?

Yorkshire technology companies attracted £159m in investment in 2020 – a 79 per cent increase on the £89m secured in 2019.

The region has become home to innovative tech companies reshaping our society – from edtech and ecommerce, to fintech and software – and Yorkshire is going to be a crucial cog in the engine for the UK’s post-pandemic recovery. 

The sector is crucial to fuelling the levelling up agenda that the North has long been promised, and improving connections within the region will be essential to maintaining the momentum behind the growth that has been fostered here.

Research earlier this autumn revealed Yorkshire’s digital industry 
is the fastest growing in the whole of 
the UK. Vacancies are in abundance, 
and salaries are competitive in the digital sector. In Leeds, the average salary in the tech sector is a healthy £57,500. 

Cheerleading, investing and nurturing the growth and opportunity of the region is integral to underpinning wider UK innovation too. 

It’s now clear that UK tech has broken out of its London silo – and the North is vitally important to ensuring that Britain continues to be at the forefront of the global tech ecosystem alongside the US and China. 

Earlier this month, we gathered in Leeds to celebrate and showcase the North’s fastest growing and most promising tech companies at the annual Northern Tech Awards. 

GP Bullhound has hosted the awards since 2011, and this year’s cohort was a distinguished cross section of the best the Northern tech industry has to offer. Software and digital services dominated the leader board this year with the likes of Matillion, Big Change and Crisp hailed as winners.

These awards go to show that it will take more than the cancellation of this trainline to deter the dynamo of Northern tech on its trajectory. 

The region’s tech and digital economy is maturing at a rapid rate, and companies emerging in the North are turning into global powerhouses with key international links and huge potential for growth. 

Whilst the cancellation of the London-Leeds high speed railway line is a stumbling block, the robustness of the talent, investment and reputation of the tech industry in the region is unyielding.  

Rather than dwelling on the missteps of today, we need to focus on the promising future of the northern tech ecosystem – and the region’s economy at large –  and be confident in the businesses that will fuel the growth and prosperity in the future.

Hugh Campbell is co-founder and managing partner of tech investment and advisory firm GP Bullhound.

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