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Is London Still Attracting All The Northern Kids?

London has been the top destination for young people for years. Are tech companies outside London making themselves an attractive enough destination to challenge that trend?

If you’re looking for somewhere to work in the UK, London is the place to be. It’s where all the jobs are, where everything happens. If you want to build a career in tech then you haven’t truly ‘made it’ unless you relocate to the capital. Right?

Wrong. But that’s the reputation that the bright shiny capital holds, and it’s why graduates have been gravitating there for years. With all its glittering promise of success, London experienced the largest net inflow of new graduates in 2014, according to research by Centre for Cities. Almost a quarter (24%) of all new graduates from UK universities worked in London six months after leaving university.

I don’t need to cite figures to convince you that more kids have moved from the North to the South than in the opposite direction, but they speak for themselves. Homes for the North found that over the past decade 310,000 highly qualified British resident workers left the North - and only 235,000 moved in the opposite direction. Three years after graduation just half of all employed students educated in the North remain there.  

There’s more to the scattering of people within the United Kingdom than the way they pronounce “bath”. It reflects, and arguably dictates, funding, job availability and resources. Students moving from one region to another for university accounted for one fifth of all movements in 2014 in England and Wales; causing a shift in the population away from non-urban areas into cities. The popularity of London is restricting the pool of applicants that northern businesses have access to, deepening the wealth and talent divide within the country and further isolating the capital as the be-all-and-end-all workers bubble.

Why is London so popular for tech graduates?

The fact is, it’s easy to understand why graduates gravitate towards London. The North, with its cheap beer, expansive woodlands and affordable housing, has plenty going for it. But the capital is still the epicentre of tech, a city that receives more funding than any other European city. The capital has much better transport links than the rest of the UK. It’s home to a thriving arts and culture scene. It’s bursting with Instagrammable tourist attractions and innumerable bars and restaurants. Many major companies are headquartered alongside thousands of promising startups. “The sheer variety and density of opportunities in the South East and London is very appealing,” explains Neil Dunlop, Leeds Practice Manager at Infinity Works.

As a Northern media graduate myself, I too felt this ‘It’s London or nothing’ mentality. “I think there’s still a lingering perception that you’ve not really made it until you’ve done a couple of years working in London with a scattering of international travel,” Neil explains. This perception can have a powerful influence on the trajectory of people’s lives. It can permeate throughout universities, absorbing into the general psyche of students, filling their heads with thoughts of a Sex and the City style life in the big city.

There is no denying that there is a thriving tech scene in London. Technology companies in London attracted £1.8bn in venture capital funding in 2017, according to data from funding database PitchBook. That’s 72 percent of the total £2.5bn raised by UK tech businesses, and nearly double the amount that nearest rival Berlin attracted.

Dean Sadler works for northern talent acquisition platform, Tribepad, and see how this sways graduate’s decisions on where to live . “What we see is people choosing cities based on where the jobs are,” he explained.“The digital tech space in London is worth around £62bn. In comparison, there is about £3bn digital tech revenue in Manchester, £1bn in Leeds and around £850m in Sheffield.” Can you blame graduates for ditching the North, when their chances of securing a job in tech is statistically higher in London? The pressure to secure a job is intense, and it’s completely understandable that this drives people to areas where they see the most job listings. For some, it’s not even about wanting to live in London in particular, it’s wanting a decent wage. Actually, Homes from the North’s research found that over half of 25-35 year old graduates would consider moving to Greater Manchester if they were guaranteed a job with the same salary.

What compounds this even more is that revenue per employee for London is much greater than elsewhere. Companies go where the money is, and people searching for work go where these companies seem to be.  

A Northern resurgence

Despite London’s advantage, tech scenes in big cities such as Manchester, Leeds, Liverpool and Birmingham, are flourishing. A record 10,016 startups launched in 2017. Unsurprisingly, a large portion of these set up shop in East London Tech City, also known as the Silicon Roundabout.  However, 76 percent more startups were founded in the North East than the previous year.

A number of large companies relocating to the North has helped to revive commercial interest in the area. Five years ago, the BBC moved 2,000 of its staff to Manchester, and kickstarted the creation of MediaCityUK, a hotspot for creativity that sits on the banks of the Manchester Ship Canal. This was a huge move for the media giants, and signalled that the North was a viable place to build your company.  Now, hundreds of fast growing tech companies call the North home. Online automobile marketplace, The Car Buying Group, began life in a store cupboard in Bradford, data analytics firm TVSquared is headquartered in Edinburgh and digital content provider LadBible can be found in Manchester's Northern Quarter. This considered, it’s possible that London’s popularity may partly be due to companies in the capital having a louder voice. “The north should shout more about its successes,” suggests Neil.

That’s exactly what northern-based founders like Dean Sadler are trying to do. Sadler founded Tribepad in the leafy South Yorkshire city of Sheffield - and is staying put, despite having reduced access to graduates. “We are recruiting in a smaller pool,” explains Dean. “There are 11 million people in London and 550 thousand in the Sheffield city region.”

With remote working on the rise, this may not be such a hindrance in the years to come. As workplace collaboration software develops and tech companies continue to experiment with flexible working hours, the 9-5 office-based jobs may no longer reign supreme and physical location may become redundant. It also helps that we are seeing a shift from one-job careers to portfolio careers. More people are seeking contract flexibility and freelance work to avoid putting all of their eggs in one basket.

The problem remains that companies can’t do much to change people’s perceptions, and how their upbringings affects how they see certain parts of the country. I mean, one in five graduates avoid the North simply because they think it rains more up there.

London calling?

The fact that everything seems to move faster in London and the South East can be a very attractive prospect when you grow up in a small rural town where buses run every hour and you spend 95% of your time at the one good local pub that closes at midnight. Jasmine Granton, digital PR Executive for AiraDigital, couldn’t wait to escape her home town of Bridlington, a seaside town that she felt was stuck in the past. “I knew as soon as I could, I needed to get out of there. I dreamt as a teen of working in the big city with my designer handbag in a very 'Devil Wears Prada' style, and though of course, this wasn't reality, I could never quite get over the dream of working in London,” she admitted.

Level39

And this is just it - London remains a dream location for many kids growing up in rural areas of the North. London’s reputation even transcends borders, reaching graduates across Europe. Martyna Maroń is an android developer at London-based health tech startup, Ctrl Group. She’s been dreaming of moving to London since she was a young girl living in Poland.  “The shine has worn off a bit but I still think London is a place of opportunity. My perception of tech in the UK is that pretty much everything revolves around London. Cities like Manchester and Birmingham might be big on tech as well, but I think London is the best and biggest at the moment,” she continued.

The buzz around the capital is magnetic, pulling young hopefuls into its heavily populated grasp. It’s one that has cultural roots as well as economic ones. Speaking to Gracie Page, an innovation lead for ad agency VMLYR, the same reasons for migrating to London came up. “I knew London was the place to be, if you want to live in a liberal and open society with access to the very best tech opportunities and all the bells and whistles of living in a Mega City,” she explained. It’s a no-brainer, she added. It's home to world-class tech entrepreneurship degree courses, and some of the best minds in tech talent. It’s where all the startups she was reading about were based.

What's next?

How on earth do we break through this heavily ingrained, almost intrinsic understanding of London? And should we even try to? Gracie argues that London’s popularity is not to the detriment of other areas of the UK. “More global talent comes to the UK because of London, which can only be good news for the wider country, as is being evidenced by the increasing tech scene in Bristol, for example,” she explains.

Still, it’s important that people in the UK and Europe realise that the North is a viable, worthwhile alternative to London. There’s nothing that northern founders can do about the climate, or people hating their hometown, but there’s are things they can control. “It’s important to grab them [graduates] while you can, by proving you are a worthwhile business to spend time with,” Dean urges. It seems that businesses are beginning to achieve this; everyone isn’t flocking to London in the way they used to. A report by the Resolution Foundation in 2017 found that the proportion of graduates moving for a job each year has almost halved from 1.8 per cent to 1 per cent since 2001. Furthermore, the latest figures from the Office of National Statistics show that London population growth roughly halved between 2016 and 2017.

So what’s responsible for the gradual change? As always, it goes back to money. Anyone who has lived in London knows that higher wages are barely noticeable when the only thing that’s affordable is the heavily polluted air that you breathe in from your overpriced flat. Opportunity may be rife and wages set higher, but the cost of living can turn people off.  Seb Burchell works for a fintech start up in Macclesfield called Mojo Mortgages. He decided to live and work in Manchester as opposed to London, simply because his income would go further. He’s one of many who made this economic decision.

There’s more to it than worrying about what is (or isn’t) in your bank account and where you are going to live. The shift is being urged on by a mixture of political backing (we've all heard the promise of the ‘Northern Powerhouse’), changing public opinion and outspoken founders who are determined for the North to get the recognition, and talent, that it deserves.

Paul Lancaster, founder of PlanDigitalUK, is trying to inspire and encourage more people to start and grow businesses in the North. To get the ball rolling, Paul put on the first Newcastle Startup Week in 2017; a five day festival of ideas. Anyone who works in tech knows that most events like these are found in London. If you don’t live here, this can make you feel like an outsider, stuck out of the loop. So it’s time we diversify where meetups and conferences are held. Not out of obligation, but because the North genuinely boasts a close-knit and collaborative environment, Paul explains. "If you are not from the North East, your image and perception is 30 years out of date,” he argued. It’s just that it doesn’t get the media attention it deserves.

His work is proof that something as seemingly simple as the geographic location of events can enact change. It’s still not going to be easy to compete with the tech powerhouses, and founders still flock there. Nikolaus Sühr Nikolaus Suehr, co-founder of digital insurer KASKO,took the business to London, after startup accelerator Seedcamp advised him that London was where they were supposed to be. Other than Seedcamp’s advice, Nikolaus and his co-founder Matt were drawn to London for its unique breed of financial services, the international outlook, and unrivalled startup ecosystem. “I don’t think there are many places on the planet that are as internationally vibrant as London, to be honest with you,” he summarised.

International vibrancy aside, Paul cites a report that found 36% of students now stay in Newcastle after graduation. “No doubt many do still leave for the South East, which is just the nature of our UK economy, but we’re seeing more and more people leave London for the North East, plus lots of ‘boomerangs’ coming back home,” he explained.

These ‘boomerangs’ Paul speaks of are about 3/5 years older than the people who are moving the other way. Fresh faced graduates get their career going in the capital, but chose to settle elsewhere when the reality of rent and tube prices sets in.

It is now up to tech companies to grab hold of this change to help burst the London bubble and breathe new life across the North. But they can’t do it all. There still face issues of infrastructure. The rail systems in the North just aren’t up to scratch; they make commuting slow and prevent efficient collaboration between cities.

Dean Sadler sees the effect of this on talent recruitment. “Businesses become confined to the area that they can recruit from. It’s just not realistic to recruit someone from Manchester to work in Sheffield; as you know they are going to encounter hurdles, that the trains are unreliable, and costly so you should pay them more - but the revenue per employee is lower than London.”

Thanks to government investment, London is extremely well-connected to other parts of the UK and internationally. It’s the main reason that Sheree Atcheson relocated there from Belfast to begin leading diversity and inclusion for Deloitte Tech. “I travel a lot and it's a lot easier to get to the places I need to be from London versus Belfast, which usually meant a trip to Dublin first or a flight to London - which was just extra time I didn't want to waste,” she explains.

I hate to remind you of the never-ending circus that Brexit has become, but it’s a shift that could affect how attractive London is to foreign workers. Aoife Whitford left Cork in Ireland three years ago and works at Benefex, an HR technology company, in London. She says the uncertainty of Brexit has increased the amount of people choosing to head to Dublin over London. “They have concerns around the right to work here in the future,” Whitford explained.

One way to overcome the uncertain changes to funding, working visas and free movement could be to build a reputation for cities across the UK as being worthwhile tech hubs.

If you’re a startup founder, it’s worth considering that London is not your only option. Try trekking across the mythical wasteland known as the Midlands, (and stop in along the way), and you may just find that the North is a perfectly fruitful place to plant your seed.

By Siân Abigail Bradley

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