Forget the year of the goat, 2015 was the year of the unicorn for the Northern tech industry. The stats say it all with 11 companies valued at more than $1 billion in the region, thus achieving ‘unicorn’ status – that’s more than Sweden and Germany.
Earlier this month, as the FT reported that the Northern technology industry is booming, GP Bullhound revealed the fastest growing tech companies, based on 2015’s figures, in the North of England and Scotland at the annual Northern Tech Awards.
We were delighted to see that our client, Tyres on the Drive, was recognised for outstanding achievement in the Judges’ Award for Leadership, having been praised by the prestigious judging panel for its company culture and integrity. This was on top of claiming 12th place in the Top 50 League Table for overall growth, with an increase in growth of 73% during 2015. It was also fantastic to see two of our other clients, Zuto and Degree53, ranking 7th and 15th respectively.
The other companies that were recognised with individual awards for outstanding achievement were Ontrac, Missguided, Reality Mine, Exco Intouch, The LAD Bible and Skyscanner – two of which are based in our hometown of Manchester. Overall, 28% of the companies are based in Manchester, 16% in Yorkshire and 14% in Newcastle. Other locations featured spread the distance from Chesterfield, to Blackpool, to Edinburgh, showing that northern tech prowess isn’t limited to the metropolises.
We mustn’t forget, however, that unicorns are not immortal; a number of unicorn start-ups are anticipated to drop below the $1 billion line this year, thus being relegated to ‘unicorpses’ – somewhat less mystical and quite simply morbid. Hugh Campbell, Managing Partner at GP Bullhound, is positive nonetheless, commenting, “For several years, the main frustration for the Northern technology ecosystem has been the lack of funding available in comparison to London. In 2015 we saw a continued growth in the level of interest in the region by investors as they all strive to uncover the hidden gems that have previously gone unnoticed. With plenty of Northern businesses showing great potential we expect to see investors jump on the train from London more often. We hope this will transfer to an increased level of investment in 2016.”
Great news for the investment potential of the region came from Virgin Atlantic this week as the airline announced that it will run the first ever direct service from Manchester to San Francisco, the home of Silicon Valley. The San Fran area accounts for a quarter of the world’s venture capital investment, so this route gives Northern digital companies a quicker, easier route into the heart of the original ‘land of unicorns’, with countless opportunities to learn, form partnerships and seek funding.
So, let’s hope that 2016 – the year of the money – isn’t one for monkeying around and the North continues to showcase its innovation, talent and determination.
Jody Marks, Managing Director, MRJ Recruitment
All eyes are on voters living in the UK as the EU referendum creeps up on us; we’ll be dropping our votes into the ballot box exactly three months today. With a campaign labelled “Brexit” – merging Britain and exit – you have to question the power of a simple hybrid being bandied around in the media. If it was “Bremain” or “Bray”, would people be influenced differently?
With only three months to go and the debate hotting up, I consider the potential impact that bringing our 43 year union with Europe to an end might have on the tech industry.
What the polls say
After the general election polls debacle last year, I don’t think anyone is putting too much faith in the Brexit polls, but they give us an indication of current thinking at least.
Financial Times poll of polls: 45% stay / 40% leave / 15% undecided
NatCen Social Research poll of polls: 50% stay / 50% leave
The Telegraph/ORB poll: 52% leave / 45% stay / 3% undecided
The polls say it’s close, but every real-time poll I’ve voted in today is around a 72:28 ratio in favour of exiting. So, what does the tech industry think?
According to a survey of 3,000 members of Tech London Advocates, 87% oppose the UK leaving the EU for three main fears – 1. Trade with EU customers will be harder 2. Sourcing talent from overseas will be harder 3. Convincing international companies to operate in the UK will be harder. Just 3% of those polled support Brexit, with the remaining 10% undecided.
Decade of uncertainty
I sit in the anti-Brexit camp. If leaving the EU doesn’t create an economic upheaval, the uncertainty of standing on our own two feet could be enough to jeopardise the future of the British economy. All it takes is a lack of confidence, a change in emotion. The government predicts it will take the UK up to a decade to extricate itself from the EU – that’s 10 years of uncertainty hitting “financial markets, investment and the value of the pound”. But, as they say, Rome wasn’t built in a day; the long, arduous process isn’t a good enough reason to oppose Brexit. On Wednesday last week – the day Osborne announced his 2016 budget – a small section of parliament discussed what will happen to the tech industry if we punt for exit. Peter Chadha, CEO of DrPete Inc, who was somewhat alone on the Eurosceptic side of the fence, made a valid point: “We hear about risk every day, but if we stay, things can’t change.”
The risk, however, seems pretty mighty. Citigroup predicts that the cumulative effect of Brexit will lower GDP growth by 4% over three years, whilst Berenberg thinks that the blow on business and consumer confidence could even trigger a recession. Let’s face it, no one wants to go through that again.
Single market or free trade?
Pro-Brexiters talk of the freedom that the UK will have if it cuts itself loose from the red tape, bureaucracy, idiosyncrasy and expense of the union, but it is exactly that blessing – freedom – that the EU bestows upon us.
We have the liberty of being part of the single market, along with freedom of movement within the 28-country bloc. Since the rest of the EU has a trade surplus with the UK, there’s no question that we’ll secure a free trade agreement with the EU should we decide to leave, but on what terms? After a shock exit, the EU might be inclined to impose harsh terms in an attempt to deter other countries from following suit. Plus, with limited access to the single market, foreign tech firms may be less attracted to investing in the UK. This will have huge consequences for the rapidly growing digital market, which, as Conservative MEP, Daniel Dalton, recently said, “Is global by default.” So, anything that makes international cooperation more difficult isn’t going to help matters. The European Commission’s Digital Single Market strategy aims to create an open digital environment, promoting cross-border online activity, investment in tech infrastructure and a single policy on how big data is managed, stored and moved, aiding cyber security and making it easier for tech companies to expand internationally. If the UK exits the EU, the government will need to consider how we will fit into the fabric of digital Europe. “We can be like Norway!” I hear you say. Yes, both Norway and Switzerland have trade agreements with the EU, but they have to allow free movement of labour in exchange and, if Brexit’s main agenda is to restrict immigration, it is unlikely the UK will agree a similar deal.
On that note, earlier this week it was revealed that immigration tops the list of UK worries and Brits see it as the most important issue affecting the UK ahead of the referendum, but restrictions on the movement of people could be catastrophic for the tech industry, which benefits from a talent pool of c. 500 million people across the EU. The co-founder of Transferwise, Taavet Hinrikus, went as far as saying that if Brexit wins, “It would make more sense for us to relocate to Europe [as even with EU membership] the biggest constriction to growth is hiring people.” The European start-up scene is massive and the idea of us all ‘being in it together’ with a flow of talent and money across the continent helps us to compete with the USA and other tech superpowers. Peter Chadha’s counterargument is that the EU talent marketplace comes at the expense of business with the rest of the world, stating that securing the visas of talented American, Canadian or Russian workers is prohibitively difficult. The government implemented the Tech Visa Scheme to overcome the bureaucracy and cost of hiring from further afield, helping digital businesses to attract and secure world-class talent from outside the EU; although uptake was initially slow. Either way, the UK’s digital sector is facing a worrying skills shortage and restricting migration will inevitably result in a brain drain, further exacerbating a growing problem.
As recruiters, at MRJ, we’re concerned about the impact of a potential Brexit on the wider jobs market, which, yet again, boils down to the feeling of uncertainty. In the first government analysis of the impact of a vote to leave, Cabinet Office minister, Matt Hancock, warned that the predicted uncertainty could affect people's jobs and livelihoods, “leaving the jobs and prosperity of the British people dangerously exposed.” The jobs market is already showing signs of drying up. Jobs site, Adzuna, reported that advertised vacancies fell by 7% in January as Brexit concerns bring new unknowns into the jobs market. Doug Monro, co-founder of Adzuna, says, “Hiring habits are changing in a sign of potential instability and employers are retaining their best workers for longer. Politicians are at risk of fuelling uncertainty fears and only increasing doubts. By doing so they’re risking a weaker jobs market. It’s a dangerous game to play. Thousands of employers and employees are already on edge. This lack of consensus is causing understandable concern for many companies.” Although it’s impossible to predict the true impact of an EU exit, the fear of the unknown will undoubtedly provoke business owners to think more conservatively about their growth plans.
If it ain’t broke, don’t fix it
The old English proverb, if it ain’t broke, don’t fix it, has some clout here. The UK tech industry is in a pretty good place right now. Fintech is booming and Tech City UK’s recent report demonstrates that the UK is becoming a ‘tech nation’, with the digital tech industry growing 32% faster than the rest of the economy, whilst accounting for 1.56 million jobs nationwide, with the average digital salary a significant 36% above the national average. Plus, there’s a list as long as my arm of projects that are helping to pave the way for UK (and northern) growth and may not even be here had it not been for EU funding – The Sharp Project, National Graphene Institute and Manchester Victoria Interchange to name but a few.
Wherever you sit – in the stay camp, the leave camp, or on the fence – the most important thing is that you have your democratic say. YouGov has revealed that 19% of eligible voters are planning not to vote; referendums like this don’t come along often, so make sure you play your part in deciding the future of the UK.
Amy Conlock, Marketing Consultant, MRJ Recruitment
We can’t quite believe it’s that “pinch, punch” time of the year again already. Last month, we reported on our successes in January, starting 2016 in the right way, and we’re delighted to say that February didn’t disappoint either. Maybe it was all down to that extra day…
We didn’t quite hit the treble this month, but we still smashed it on the sales front and are currently working at 150% above our annual target. We’ve got a great team of dedicated, ambitious recruiters at MRJ who we’re super-proud of. Well done team!
This month, we’re pleased to welcome HiHo aboard the MRJ ship. HiHo is an app that connects customers with skilled specialists, from cleaners to gardeners and plasterers to plumbers, so if you’ve got a job that needs doing, these are your go-to guys. We’re passionate about all things digital and new business growth, so we provide a bespoke, flexible service for tech start-ups – look out for more news about this coming very soon!
Our executive search division is taking off, with current assignments including a CTO (national retailer, Yorkshire – £160k), Head of Digital Delivery (financial services, Yorkshire – £125k), Head of Programme Management (financial services, Yorkshire – £125k) and a Financial Controller (Push Doctor, Manchester – £70k). Get in touch if any of these roles interest you.
We’ve recently moved into our new offices in Queens Chambers and, as the team grows, we’re discovering more and more need for an Office Manager to keep us in check. We’re looking for an organised and responsible business and administration apprentice to join the team in this role. Get in touch for more information.
We celebrated our Recruitment Manager, Ashley Loofe’s third year at MRJ with a night out at Junkyard Golf and Wing’s. The gaffer won the golf, but still ended up paying – how is that right?
Plus, we were nearly crowned champions of the Forever Manchester Football Tournament, but unfortunately lost 1-0 to Gekko in the final – very worthy winners and an even worthier cause! Check out Forever Manchester’s website if you want to find out more about the great stuff that they do in Greater Manchester communities.
Our first week back in January was manic, but mania often equals success, so we weren’t complaining. It appears that the first week set the tone for the rest of the month as January was one of our best yet.
1. We won the treble
Ok, not the actual treble, but we tripled our monthly sales target. Our star employee, Billy Fletcher, absolutely smashed it this month. He’s been part of the team for just under a year and has already made the web development market his own. We can promise he’s destined for good things.
2. From French style to a doctor on your doorstep
We’re super excited to add four new clients to our portfolio – La Redoute, Push Doctor, Provident Financial and Ryman Stationery.
Eren Ozagir from Push Doctor says, “We are very excited to be working with MRJ as we expand our amazing team and welcome a whole range of different skill extensions, from digital marketing to development, to our company. As a start-up we need to work with a recruitment firm that really understands the dedication it takes to source super tech talent in a competitive marketplace and, in order to be successful, they have to understand your business and culture, so they can present your story to candidates and use it to attract the very best people. At MRJ you'll find a team that works with you day and night to find real talent, wherever it is."
3. Making a house a home
New year, new us and all that. We’ve relocated our HQ downstairs one floor to a recently renovated suite in Queens Chambers on John Dalton Street. Come over, say hello and challenge us to a game of table tennis!
4. Marketing newbie
We’ve welcomed a newbie to our team – Amy Conlock, who is working with us as our marketing consultant. Amy is the eyes and ears of our Twitter and LinkedIn, and, as our in-house wordsmith, you’ll see the odd blog or two from her. We’re also growing our recruiter division, so get in touch if you’ve got a few years’ experience and want to be part of a dynamic agency working in the digital/tech industry.
5. Getting out and about
We can’t say we stuck to Dry January as we had the first of our monthly socials on 21st. Huge thanks to Breakout Manchester and Scene Indian Street Kitchen for a great night! We also attended industry events, including UserConversion’s CRO event for start-ups – the discussion and the doughnuts were top notch – and IoD 99 drinks.
Now, let’s see if February can trump that.