There is a “growing shortfall” of tech talent in the South West as the number of new firms in the regional sector continues to rise, new analysis has found.
The number of new tech companies incorporated in the South West jumped 25% last year, according to audit, tax and consulting firm RSM UK.
A total of 1,445 limited tech businesses were registered in the region in 2021 - up from 1,156 in 2020.
RSM said the South West had a "deep tech ecosystem" across a range of disciplines, in particular software. It added average pre-money valuation for late-stage software businesses rose to €26.2m (£22m) in 2021, which it said “bodes well” for the region.
Ben Bilsland, partner and media and technology senior analyst at RSM UK, said while a greater number of new businesses would look to take advantage of the apparent buoyancy in the market, a "significant task” remained to recruit and retain workers.
"The ability to live in the South West but work remotely is a double-edged sword, as whilst this attracts good people to a fantastic area of the UK, they may not be making direct contribution to businesses operating in the region’s ecosystem," he said.
The study found overall UK tech incorporations increased 62% in 2021, from around 23,500 to 38,200. The greatest number of new tech firms were incorporated in London last year with around 18,500 - reflecting a 94% growth.
RSM said the UK tech sector this year became only the third economy, alongside the US and China, to reach $1tr in value after a surge in growth throughout the pandemic.
The firm said the UK’s digital industry was now worth more than double Germany’s equivalent - its closest European rival.
Mr Bisland added: ‘Software solutions that can be entrenched within existing global industries have proven particularly attractive where they bring the benefit of reduced costs and increased productivity.
“Increasingly, the average business will leverage tech enabled solutions which leads to more and more companies perceiving themselves to be a tech business than in the past. Continuing advancements in computing power, wide-spread 5G and increasing interest in new ideas such as the metaverse is likely to accelerate this trend.”
Like this story? Why not sign up to get the latest South West business news straight to your inbox
