Where in Britain works best for IT?

London boroughs on top

So it is no surprise the two London boroughs of Hounslow and Richmond upon Thames come out on top in the rankings of suitability for IT businesses compiled for this article.

The assessment, based on statistical areas used for economic research, considers established technology businesses, workforce education levels, house prices and broadband speeds.

O’Donnell, who is also the CIO for insurance and risk management firm Gallagher, says fast broadband connections can be hard to find in parts of central London with tight planning controls restricting the green street cabinets generally used for connectivity.

“Westminster wanting everything to look smart and sweet means that businesses in Westminster actually struggle to get connectivity,” he says.

There are plenty of other reasons for locating just east of Heathrow airport. One is access to the airport itself, but another is that well-educated people from all over the world live near it. “We’re very much an international business – I think in our firm we speak 23 languages,” says O’Donnell.

“Getting a highly diverse workforce who could communicate with a highly diverse customer base was really critical to us.”

Lower pay expectations

Other factors include lower pay expectations than central London; easy access to the capital; good rail links; and roads where it is possible to find a parking space. 

Digital music library I Like Music was originally based in central London, but moved to a converted church hall in Richmond upon Thames, a mile or so south-east of Isleworth. The building allows it to store all the vinyl records and CDs it has digitised, but the location is also better for employees, according to managing director Buffie du Pon.

“Particularly for our data and technological staff, they are sitting at their computers day in, day out,” she says, meaning they can “walk out into a nice environment at lunchtime, go and get some fresh air.”

I Like Music’s office is near to Richmond’s train station, shops, pubs and restaurants, and a few hundred yards from the banks of the Thames, where one member of staff has lunch each day in the summer. The pleasant surroundings help attract people, but central London is easily accessible by train and Underground – important for regular meetings with clients including the BBC.

There is also a cluster effect, du Pon thinks, with eBay, Notonthehighstreet.com and PayPal all having large technology offices in Richmond.

“I feel quite confident that we, as a very small company in comparison to those, find ourselves in good company to attract the right staff,” she says, adding that Richmond’s wide range of coffee shops seem to be largely inhabited by people working on laptops. The Richmond upon Thames Chamber of Commerce has a focus on technology, with its awards including innovation, start-up and website categories and events held at PayPal’s offices.

Greater London contains five of the top 10 areas in the ranking, with Haringey and Islington in north London taking third place. Despite being marked down for high house prices, many of the capital’s areas score highly on the proportion of their workforces with post-school qualifications, properties with access to ultrafast broadband and concentration of information and communication-related businesses.

Berkshire is second best

Berkshire, made up of six council areas west of Heathrow, is second overall. The wider Thames Valley area, which includes Oxfordshire to the north, is often seen as the nearest thing the UK has to Silicon Valley, and the data shows that Berkshire has the highest proportion of economic output from information and communications businesses.

Houses in the area are generally cheaper than in London and there is good access to ultrafast broadband, although its workforce is less well-educated than the capital’s.

Berkshire’s predominance in IT was built on its motorway and rail links to Heathrow and London, says Robert Mansfield, chief technology officer (CTO) for communications technology supplier Redwood Technologies.

It’s been a popular location for companies such as Panasonic, 3M, Dell and Fujitsu to set up their UK and European headquarters, he says.

“You have a self-fulfilling environment where it’s attracting IT because the IT companies are here.” Employers can recruit from a large pool of experienced technology staff, while employees have a choice of places to develop their careers.

The area also offers choice over where to live. Berkshire includes Reading, a fast-growing city of 163,000 people; new towns including Basingstoke – Redwood’s base – and Bracknell; more traditional towns such as Windsor; as well as smaller towns and countryside.

“A lot of the young IT staff we have live and socialise around Reading,” says Mansfield. “There are fantastic locations for settling down with families and fantastic schools in the area.” And for both work and leisure, London is a short journey away: “You’ve got the best of both worlds here.”

Moving to Twilio

David Parry-Jones, a board director for Thames Valley Berkshire local enterprise partnership and currently vice-president for northern Europe at VMware, will soon to move to cloud communications provider Twilio.  

He will help decide whether to keep its European headquarters in a location near Shoreditch, just outside the City of London in the borough of Hackney.

The area’s concentration of technology companies gives it an edge in terms of recruiting talented people, he says, but adds: “You’re competing in a highly competitive environment, with a very high cost of living for the staff who work for you there.” Moving west would make life cheaper for both the company and its employees.

Parry-Jones says that if the office moves it will be to somewhere from Bedfont Lakes in Hounslow, used by SAP, IBM and Cisco, to Green Park in Reading, where office space costing a quarter of the prices of some parts of central London. Some intermediate locations have particular advantages: Slough has relatively low property prices and a lot of data centres, making it a good place to establish another one.

“If you’re in London, you’re paying more but getting access to potentially a higher-skilled and more cosmopolitan workforce,” says Parry-Jones. Berkshire tends to host longer-established companies, while the capital has offices of many newer, cloud-based firms: “They tend to be more urban-based. Even in the US, instead of being in Silicon Valley they are in downtown San Francisco.”

Local universities are key

Similarly to the US, there are other technology cities elsewhere in the UK, just not on the same scale. Many draw on local universities – although this is also true of Imperial College and others in London, and Reading and Oxford universities in and near Berkshire.

Darlington in north-east England, which can call on nearby Teeside University, is the highest-ranking area outside London and Berkshire at fourth overall in the ranking, due to a high proportion of information and communication businesses, cheap house prices and excellent availability of ultrafast broadband.

Other top 10 areas include other university cities Edinburgh – the highest-ranked Scottish area and sixth overall – Nottingham and Bristol. There are four more areas of London in places 11 to 20, along with Brighton and Hove, Portsmouth, Liverpool, Derby and Glasgow. The highest-placed suburban area after Berkshire is its neighbour North Hampshire, at 18^th, and Cardiff and Vale of Glamorgan is the best-placed Welsh area at 23^rd.

Methodology

The ranking uses the 168 NUTS 3 areas (Nomenclature of Territorial Units for Statistics) of Great Britain, a classification used for economic data, with most of these areas containing one or more local authorities. Northern Ireland is treated as a single area, due to data limitations.

Each area is marked out of 10 for four measures, with a total score out of 40. Concentration of industry is based on the proportion of each area’s economic output in the Office for National Statistics’ (ONS) information and communication category, using gross value added data for 2016. Berkshire, where 18.7% of economic output is in this category, gets 10. The areas with the lowest proportion of 1% receive zero, with others scored proportionately between these two. The UK average is 6.1%.

Workforce education is based on the proportion of workers in each area with level 4 and above post-school qualifications, including degrees and higher apprenticeships; the ONS updated this based on 2017 data for Computer Weekly.

For England and Wales, the data uses the average house prices for the 12 months to March 2018, with 2017 calendar year data used for Scotland and Northern Ireland. The data comes from the UK’s land registries, with lower average prices scoring higher.

Ultrafast broadband is based on the proportion of properties that can connect to such a service in an area, defined as 300Mbit/s or greater, according to Ofcom’s spring 2018 Connected Nations research; the highest availability is in Wolverhampton with 85% of properties, compared with a UK average of 45%.

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