The number of new tech companies being set up in the North West rose by almost 30 per cent in 2017 according to new analysis by RSM.
In total, there were 707 software development and programming businesses incorporated in the North West region in 2017, a 29 per cent increase on the 550 companies set up in 2016.
The region recorded the third highest number of new tech businesses in the UK in 2017, after London and the South East.
Nationally, there were 10,016 technology businesses incorporated in 2017, with year-on-year rises recorded in every region in the UK.
The figures validate the Chancellor’s recent claim during the Spring Statement speech that a new tech firm is set up in the UK every hour.
Commenting on the figures, Jonathan Lowe, technology lead at RSM in the North West said: ‘These figures show the region’s tech sector is growing at a very healthy rate despite the fears of a post-referendum slowdown.
‘There are a number of reasons for this. The region’s universities are playing a key role in developing and nurturing exceptional talent and the country as a whole is continuing to attract the world’s brightest and best. The North West has had a number of recent technology success stories and this is leading to real momentum in the growth of the sector.
‘Entrepreneurs are able to gain good access to finance, either through traditional sources of debt at relatively cheap rates, or from venture capitalists and private equity funds.
‘The UK’s tax regime is also proving to be an incredibly powerful tool in encouraging tech businesses, who take advantage of legitimate tax saving and incentive programmes. These include the Enterprise Investment Scheme, Research & Development tax credits, video games tax relief and the Patent Box regime
‘There is undoubtedly the political will to build momentum and generate further growth as part of the government’s overall industrial strategy. However, there are some clouds on the horizon. While many in the sector will be cheered by the news that EU nationals will continue to be able to come and work in the UK during the transition period, the longer term position is as yet unclear.
‘As interest rates starts to rise, we may also see a shift away from venture capital and private equity as investors seek returns from safer investments. For now though, the funding environment is incredibly benign.’