We take a look at the thriving UK Tech scene and the role that the North East plays within it

London is the beating heart of "Europe's digital epicentre" (Tech Nation 2017). Home to 4 of Europe's best universities - more than any other country, never mind city (Tech Nation 2017) - it has top talent on tap, and this has been key to supporting its massive economy, which has gone from strength to strength in recent years. Between 2012-2015, the cluster received more tech investment than the next three biggest European clusters combined (£13.8bn vs Paris' £3.6bn, Berlin's £3.3bn, and Amsterdam's £3bn; Tech Nation 2017), and it accounted for 33% (£2.2bn) of the £6.8bn invested in UK tech last year (a figure nearly 3 times that raised by any other European country: £2.4bn in France and £1.4bn in Germany; Tech Nation 2017; London & Partners).

So, surely, it's the place to be for tech, right? Well, maybe not.

London's issue is its sheer size. The gravity of its economy has driven prices into overdrive, with the average London home (£482,779) costing over twice the national average of £236,519 (Gov)! But it's not just housing that'll burn a hole in your wallet: average monthly costs, excluding rent, are £2,720.47* for a four-person family and £757.87* for a single person (Numbeo London). While pay is generally higher in London, it doesn't come close to accounting for these mammoth costs, leaving the city exposed to a "mass exodus of talent" (StartUps).

So, what are the alternatives?

Don't worry: there's more to UK tech than one city! London might have taken 33% of the £6.8bn invested in the UK last year, but that means a huge £4.6bn went outside of the capital - a 50% increase from the previous year (Tech Nation 2017) - with the North of England alone taking £327m (Tech North). £4.6bn is a monumental amount of money. To put it into perspective, if you scroll back to the 1st paragraph of this blog, you'll see that the rest of the UK actually took far more than the whole of France (£2.4bn) and Germany (£1.4bn) combined!

One place in particular that presents a real alternative to the capital is the North-East of England. With 4 solid hubs in Newcastle, Sunderland, Middlesbrough, and Durham, the area is establishing itself as a real digital heavyweight. The increase in tech business birth rates in 2016 is testament to this, with Sunderland recording the highest rate in the country at 19.3% and Newcastle (17.5%) and Middlesbrough (15.1%) performing above or near the national average of 15.2% (Tech Nation 2017). Durham, too, is performing well, with local digital financial company, Atom Bank, receiving the largest round of funding in the UK in Q1'17 (Tech City News, Q1).

While all 4 clusters are strong, the driving force behind North-East tech is Newcastle. The financial and cultural capital of the North-East, Newcastle has gained a reputation as one of the country's top centres of high-tech industry (StartUps Cities Index). This comes after the cluster enjoyed an increase in the number of digital tech businesses at a rate (39%) nearly twice the national average (22%) between 2012-2015, and subsequently recorded the 2nd highest number of high-growth businesses in 2015 (22%; Tech Nation 2017). The reason for this continued growth is the support available. With the 4th highest number of software collaboration platform ‘Github' users across all programming languages, 1st rate networks like Dynamo North-East and Digital Union, and top co-working space like Campus North and Hoults Yard, Newcastle produces innovative companies with significant staying power. As a result, internationally recognised firms like True Potential, the only UK fintech firm to place in the Deloitte Technology Fast 50 for three consecutive years (Tech Nation 2017), Sage Group, the world's 3rd largest supplier of Enterprise Resource Planning (RKLE Solutions), and ZeroLight, the creators of the world's most advanced visualisation solution for the automotive industry (ZeroLight), have all thrived in the city in recent years.

Quality of life is key

The area's doing well, so what? So are loads of clusters! Well, the thing that sets the North-East, and Newcastle in particular, apart from the rest is the salary vs cost of living ratio. Newcastle saw the biggest increase in digital tech salaries last year at 46% (16 percentage points ahead of anywhere else) after enjoying the 2nd highest national rise (27%) in the 5 years up to that point (Tech Nation 2016). This continued increase has seen salaries in the North-East city become the 4th highest in the country, behind only London, Reading, and Edinburgh (Tech World).

While these three clusters may pay a little more, Newcastle blows them out of the water with its cost of living index of only 70.53* (Numbeo Newcastle), as compared to London's 88* (Numbeo London), Reading's 81.49* (Numbeo Reading), and Edinburgh's 77.78* (Numbeo Edinburgh). As compared to the North-East city, rent prices are a staggering 193.94%* higher in the capital (Numbeo Newcastle vs London)! Remember the dizzying cost of living in London from the 2nd paragraph? Well, it's a different story up in Newcastle: excluding rent, the average monthly costs for a four-person family are 32.08%* higher in London than Newcastle, with single person monthly costs coming in 27.97%* higher, too (Numbeo Newcastle). In fact, when cost of living is accounted against average pay, those slogging it out in the capital are left with 72%* the standard of living that we're enjoying up here in sunny(ish) Newcastle!

*All statistics are correct at the time of writing (23/08/2017)