As the leader of a Bristol based recruitment business, I am constantly talking to my customers about the technology and innovation sector in the South West and its challenges and opportunities in the coming years.

In this, the first of a series of articles about this subject, I’m delighted to have collaborated with Nick Sturge, South West Chair of the Institute of Directors, who agreed to be the principal contributor to this interview and discuss the flourishing tech scene in the South West and what local conditions have been created to allow this to happen. Nick is Director of the Engine Shed and has been pivotal in supporting a number of Bristol’s start-ups build and scale.

Tom Clarke (TC): There’s a lot of data that consistently says that the South West is punching above its weight when it comes to tech start-ups being successful, given your role with the Bristol incubator I’d be really interested in hearing your thoughts as to why;

Nick Sturge (NS): For me it’s all about the quality to fluff factor. Businesses come to Bristol, be they a space operator or an investor and they find a lot of innovation because of its long-standing industry sectors. Aerospace, semiconductors, microelectronics, financial services are all well-established, we’ve been a commercial trading city for a thousand years. In the consumer space if you don’t get a million users in a year you’re toast, most of our start-ups are focused on business to business sales.

Going back to quality versus fluff; the people that then start up in Bristol are typically already experts in their industry, so businesses tend to start up with a solid base.  You’ve also got this complex culture which is counterintuitive as to why we've got an innovative culture. There’s a strong level of cynicism. Citizens of Bristol are quite resistant to change, but if you get past that initial hurdle, change is embraced. You don’t just start a business in Bristol because it’s a sexy thing to do, you start it to be successful.

I think that’s why no one is surprised if something unusual happens in the city because we’re just used to it.  Banksy shredding his picture, I'm sure an awful lot of Bristolians thought “oh yes, makes sense!” 

The local government stats tell us that the number of start-ups per head of population is lower than the other core cities, but the survival rate is much higher. 

The SETsquared incubator that we run here the aggregate revenue last year of our 83 companies will be roughly £75 million, that’s roughly 10X the average across the UK. It’s because we’re global, our companies tend to be business to business and our survival rates are generally excellent. There’s loads of examples but companies like Ultrahaptics and Graphcore are doing some amazing stuff that’s getting recognised across the UK.

TC: Do you think that this is any different to other areas of the UK that have tried and failed to develop their local tech and innovation communities?

NS:  When I started my own business, it was really ‘seat of the pants’ stuff, we made so many mistakes. Over the last 12 years with SETsquared and the Engine Shed its about making sure that the city’s business ecosystem is right and supporting start-ups, which I think we’ve done well so far.

There is a much stronger level of confidence within people, businesses, communities now.  There's still a whole load of challenges in the city, but you've always got these tensions in the city, but that fuels creativity.  Banksy wouldn't be able to produce his artwork with the messages if there wasn’t angst between social groups, political classes. I think its creative tension that we’ve helped thrive in a business community.

Going back again to the quality versus fluff factor, which I think is key, in London with a population approaching ten million an investor could see hundreds of proposals and not see any that were viable. In Bristol & Bath, despite our population including the surrounding areas being a little more than a million an investor could only see 5 pitches and want to work with them all. That’s what we’ve been working on at Engine Shed, how we support the survival rate of the businesses that we work with.

It used to be that when I was in London talking about our tech scene that people thought that Bristol was cute, part of the country that they might go on holiday to, but now the dialogue has completely changed, people want to emulate what we’re doing.

TC: Why do you think that is, what has changed?

NS: So, partly we've done a very good job in the business incubation piece with SETsquared, since 2002. We've been quietly plodding on creating some good quality businesses when there weren’t many incubators around.  

One of the key start points was when we were granted our Local enterprise partnership (LEP). We were one of the first LEPs to really get going.  It got going with some momentum with an amazing initial team and suddenly that ball started rolling.  And then people come to Bristol to start their businesses, it becomes easier to recruit talent, the businesses that were generally starting up actually connecting to the local business community, rather than just sitting in their own bubble. We naturally have a global outlook because it’s a global city and around 60% of our output is for export. So, I think those things together just nudged the snowball, if you like. They sound trivial, but I think made a massive difference.

Because we’ve started to have some big successes, business has been proud to shout about the fact that it’s from Bristol, rather than just a province in the UK. Our business community is quite tight knit which has meant its easier for us to grow as a whole. As a result we’re seeing some amazing talent move here from London which is acting as a further accelerant. If we weren’t quality, then we would never be able to attract these amazing people.

The urban myth that Bristolian fisherman in the 1400s discovered America, but just kept quiet about it, because they found this rich fishing stock and would bring fish back and keep it quiet and not pay tax on it. They eventually had to hire a renowned explorer, John Cabot, to ‘discover’ America. That is very Bristolian.

TC: The last few years have seen the Bristol tech scene transform, what do you think is next?

NS: 30% of the money that we generate at the Engine shed gets ploughed back into ecosystem experiments. We’re always trying to do things differently and better. We had a speaker in recently who has worked closely with Jeff Bezos and Eric Schmidt; she said something that really rang true with me. One of her biggest fears in technology is AI, not that it’s removing jobs, but that its being almost exclusively designed by white men in California. We need a much more representative tech workforce, it’s an economic imperative. We want to continue growing the tech scene in Bristol but using our, and the Universities experience, and finance to help bring more diverse talent into tech, it’s incredibly important over the coming years to achieve that.