Manchester’s digital transformation

Read time: 5 mins Added date: 31/05/2023

Read about digital strengths, opportunities and challenges of Manchester’s tech sector.

Manchester is the largest city region economy outside London. Its vibrant tech sector plays an important role in that growth, which is in turn underpinned by robust digital infrastructure.

Greater Manchester is a £5bn digital powerhouse with sub-sector strengths in cybersecurity, AI, ecommerce, fintech, gaming and creative. It has proven fertile ground for the more than 10,000 digital and tech businesses based in Greater Manchester, who collectively raised a record £532m from investors in 2022, according to Dealroom data. Of those, around 1,500 are high-growth companies – more than in the West Midlands, West Yorkshire or the Edinburgh area. Its innovative businesses generated more than 69,000 creative, digital and tech sector roles advertised in Greater Manchester last year.

MediaCityUK at Salford Quays, home to the BBC, has helped put Greater Manchester on the map, attracting swathes of talented creatives, entrepreneurs and skilled workers to the region. It is also a case study of the area’s digital transformation over the past decade. In 2010, the year before the BBC’s relocation, the area’s digital creative sector employed 6,310 people. By 2019, that figure had more than doubled to over 15,000.

“Greater Manchester is a tech hub with a proven track record and high growth that helps the city attract the country’s brightest digital workers. From strong support networks to high calibre blue chip companies, Greater Manchester is well positioned to continue its digital transformation.”

Garry Birchall Relationship Director, Greater Manchester, at Lloyds Bank

Powered by tech firms large and small

Manchester’s digital sector is powered by tech companies large and small. It is home to ecommerce giant THG, formerly The Hut Group, which floated on the London Stock Exchange in 2020 at a £1.8bn valuation.

It has attracted blue chip companies like Microsoft, which opened an office in Manchester in 2017 to build a “strong base” in the North of England, along with other global brands such as BooHoo and Google.

Manchester’s start-ups and scale-ups include fintech company Orka, cybersecurity firm Netacea, and delivery app Modern Milkman. High-growth tech companies are supported by more than 60 start-up and scale-up facilities and programmes located across the city region, along with a healthy pipeline of talent from the region’s higher education institutions. Together, these dynamics have put Manchester firmly at the heart of the North West’s tech ecosystem.

“Manchester has a thriving tech ecosystem with a vibrant start-up scene, tech hubs, and strong research and educational institutions. The city undoubtedly fosters collaboration, innovation, and community engagement through support from a national, mayoral and council level,” says Matt Robinson, Head of Nations and Regions at techUK, a trade association. “Manchester, and more broadly Greater Manchester, attracts investment and offers a supportive environment for entrepreneurs looking to grow or be based in the North West or as a new location for those businesses expanding beyond London and the South East, making it a leading technology hub in the UK.”

Manchester’s digital strengths and opportunities

The foundation for any tech ecosystem is determined by its strength in digital. Manchester has frequently been identified as one of the leading tech ecosystems outside of London.

Greater Manchester’s gigabit internet coverage stands at 80.9%, above the UK average of 73%, while 41% of premises have full fibre connection. Fast and reliable connections are essential to digital-first businesses, and according to techUK’s Local Digital Capital Index, Greater Manchester’s digital infrastructure ranks eighth out of 41.

However, it ranks 21st for digital adoption, indicating there is scope to improve and unlock further growth. The Greater Manchester Combined Authority (GMCA) and partners have published a plan to address this and boost digital capabilities in the city area.

The Greater Manchester Digital Blueprint (PDF, 6.46MB), unveiled at the DTX event, is a refresher of the area’s priorities in tech and digital for 2023 to 2026. It has identified five key priorities to boost Greater Manchester’s digital credentials.

They are:

Empowering people and communities
Building responsible, data-driven public services
Enabling a resilient and prosperous economy
Creating connected, inclusive, sustainable places
Strengthening Greater Manchester’s position as a global digital influencer

The plan aims to get 200,000 people ready to benefit from the digital world in 2023-24 and grow the size of Greater Manchester’s technology and data sector size to £5.5bn in 2025 and £7bn by 2029.

“This blueprint provides a clear roadmap to maximise Greater Manchester’s digital potential. From fintech to cybersecurity, Manchester has demonstrated it is a flourishing location for technology businesses and improving its digital capabilities will provide an additional boost. Through our teams of local Relationship Managers across the region, Lloyds Bank is committed to supporting the ambitions of Manchester’s tech businesses.”

Garry Birchall Relationship Director, Greater Manchester, at Lloyds Bank

Tackling digital challenges

Initiatives are already underway for this. Organisations like the Early Years App are digitising paper-based assessments and manual processes in child development reviews. Meanwhile, the Greater Manchester Digital Security Hub (DiSH) will provide support and mentoring to growing digital security businesses in the city region. To further support this, the city region has created a Digital Inclusion Taskforce, which will see its 250 members work to identify barriers to digital inclusion, a move geared towards increasing digital adoption.

Local-national partnerships, such as Innovation Greater Manchester (IGM), will also play a key role in meeting the roadmap’s goals. The report has also set the goal of achieving a minimum of 90% gigabit coverage across Greater Manchester by 2024. Other report priorities include strengthening the digital talent pipeline, building digital skills literacy, extending digital infrastructure and harnessing academia testbeds and research.

“Greater Manchester’s digital capabilities are impressive, with the fastest-growing digital economy in Europe,” says Naomi Timperley, Co-Founder of Tech North Advocates. “The region’s collaborative approach, involving communities, businesses, academia, and public services, fosters opportunity, innovation, and invention, benefiting everyone.” She adds: “With such strengths and achievements, Greater Manchester is globally recognised as a world-leading digital city-region, driving digital innovation and positioning itself at the forefront of the digital landscape.”