Technology industry figures from across the North East have responded to a recent report that suggests the North is suffering a “brain drain” which is hampering growth of its technology clusters.
Think-tank Policy Exchange’s ‘Silicon Cities’ report states 37% of North East STEM students - in science, technology, engineering and maths - leave the region after graduation. This proportion was much higher in Yorkshire and the Humber at 55%.
North East technology figures have refuted the message, saying the region’s industry is able to retain and attract top talent, despite the dominance of London and the South East.
Speaking to The Journal, Ignite100 co-founder and director Paul Smith, said: “I don’t see this as a massive problem, in fact its probably unreasonable to expect anything less than a third of graduates leaving.
“You have to bear in mind that this proportion was probably more like half until fairly recently. Given the population of London and the South East, of course there are more start-ups and established businesses.
“The North East has an opportunity to cultivate companies on a much lower cost base with a skilled workforce at its disposal. I think its wrong to think about it being a choice between the South East and North East. Most of the early stage technology businesses we work with base their design, development and marketing functions in the North East and travel to London to execute sales or gather investment. They play to the strengths of both.”
The report acknowledges the North East’s growing strength in technology, helped by organisations such as Dynamo North East and Sunderland Software City.
Statistics from Dynamo North East show the region has a higher proportion of the workforce operating in technology posts than anywhere else in the UK.
Chair of Dynamo North East, Charlie Hoult said there was no need to worry about the North East.
He commented: “The Policy Exchange report has a big focus on the Newcastle tech cluster and a wide range of ideas to help us. The North East has great graduate retention and ‘boomerang effect’ as people return here after a few career hops - with experience and a family.
“Dynamo is proving the strength and depth of the tech cluster - and there is more to do on the skills pipeline, collaboration locally and outreach beyond the region. We are canny, innovative folk here and this will continue to give us success.
“Sage Software is here: the only FTSE 100 UK software firm and the fourth largest business software firm in the world. Cambridge doesn’t have our employment numbers in tech either - just pockets of research leaders that are commercialising but not pulling in mass jobs like North East firms, especially linked with HMRC or DWP.
“We are only a hop away from both Cambridge and London - but we also have links whether Oslo or San Francisco. The North East has an international perspective and can slice or dice across issues and business strengths in our clusters - so geography isn’t as important these days. Our lifestyle trumps anything in the South, as we all know!
“Don’t keep worrying about the North-East - it’s doing fine on this measure. And the foundations of current growth are set to add to our resilience.”
Andrew Robson, CEO of Perfect Image, said: “There is still a perception amongst many graduates that the best jobs are in the South East.
“I think this is largely based on people looking at the headline salaries and forgetting about the actual cost of living difference.
“London is always going to look attractive to any young person seeking their first job and I don’t think this is a problem that is unique to the IT industry or the North East. However, I do believe that real progress has been made in the last few years with companies and organisations like Dynamo and Sunderland Software City publicising the high quality, exciting roles across the North East in the IT sector. It’s also clear that there are increasing numbers of these roles in the region and a positive virtuous circle is starting where we can really grow a sizeable industry cluster.
“I do think that a lot of people are starting to consider moving (or moving back) to the North East after a few years in the South East when they appreciate the lifestyle and affordability that is available here. Once people see that there is a thriving and still growing IT sector, they realise there isn’t a career risk in relocating here, and do so willingly; as an industry we just need to make sure that people see this is the case and shout about our success stories.”
Graham Sexton, head of Department for Computer Science and Digital Technologies, said the figures for the North East were actually encouraging.
He said: “On the plus side, if 37% of STEM graduates are lost to other regions, that means some 63% are staying in the region.
“Universities are playing a crucial role in this and all of the major institutions, including Northumbria, Newcastle, Sunderland and Durham, are making a significant contribution in terms of graduate retention.
“A lot of technology industry is based in the South East, simply by virtue of the labour pool available there. Unfortunately a lot of people don’t see the North East for what it is - and that is a region that’s strong in native technology.
“We’ve got companies like Accenture who have grown considerably from their beginnings - and are now looking to take on graduates. Those sort of companies are helping to create some great opportunities in the region.”
Graham explained the University uses placement programmes to connect graduates and undergraduates with regional firms, many outside of the IT sector.
He added: “We’ve had some really successful placements that have led to jobs. For example, we recently placed a developer with Sevcon - the Gateshead-based specialist in electric vehicle control systems. They have been able to take software expertise into a local firm and deliver value.”
North East-grown software firm Scott Logic said it had no trouble in filling its recent intake of graduates.
Marilyn Morrison, HR director at the firm said: “With 24 hires over the summer and 6 more joining us in September, our view of the North East tech economy is really positive.
“The combination of a great working environment, complex technical challenges and the work life balance offered by the North East make a real difference.
“Our graduates come into a planned induction program and within a year will be working with highly experienced teams on sophisticated software projects for some of the largest multinational companies in the world.”
Marilyn explained that Scott Logic work hard to attract the best graduate talent across a roles such as software developer, software architect, project manager and tester.
She added: “We have a team dedicated to the task. Our resourcing group work in close collaboration with the leadership team to promote the Scott Logic brand as an exciting and fulfilling place to work . It’s a continual and long term process.
David Pinches, head of Marketing and Products at Scott Logic added: “With a focus on high quality software consultancy and products, both Newcastle and nearby Sunderland are working to make the North East a major technology hub.
“Scott Logic as an active participant in Dynamo, the North East industry body to promote the growth of the IT sector in the region, is looking to lead this growth in actions as well as words.”