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There’s No Such Thing As A Digital Industry

Last night was spent debating Manchester’s future as a home to technology innovation, with representatives from the city leadership, technology, telecoms, law, and finance firms. One issue really stuck with me. Everyone was keen on the idea of promoting the digital industry but there was frustration at the lack of a common voice for this sector.

The problem is this: no-one can speak for the digital industry because there is no digital industry. Not in Manchester. Not anywhere. What is loosely grouped into ‘tech’ or ‘digital’ is actually three or four (possibly even more) very distinct sectors with very, very different needs.

In Manchester I’d classify these as ‘Products’, ‘Services’ and ‘Infrastructure’ but you could probably add ‘Materials’ and ‘Advanced Manufacturing’.

Product companies are proper tech start-ups. Companies that are incubating an idea with great potential to scale. They need an environment to network and meet to start with, so that teams can naturally assemble. Then above all else they need time. Time means the right sort of finance, and low overheads: office space, connectivity etc. Once they reach scale they need access to talent: generally high level talent with specific, technical skill sets but also sales, support, marketing and creatives.

Services companies are largely marketing/digital agencies of one form or another. The skills they require are very different, as much creative and inter-personal as technical. These companies have limited potential for scale: it’s a highly competitive market. Growing means adding people and the cost of managing those people rapidly starts to diminish the focus of the founders. The best hope is reasonable scale, stability, and good margins, and ultimately perhaps a trade sale to a local rival or national network. What they need is opportunities to sell and access to contracts, from the public sector and large local companies.

Infrastructure companies might serve the start-ups, or the agencies, or any other businesses around Manchester. Depending on their particular focus the challenges might be access to power, the cost of laying fibre, or competing with unfairly advantaged national players. They need technical skills but those skills are generally very different to those required by the product or service companies.

Manchester’s agencies have a good representative body. But that body doesn’t speak for start-ups, and it doesn’t speak for the infrastructure players. In fact I don’t know of any single bodies that claim to speak for those groups and their needs.

If Manchester, and the UK as a whole, is going to have future economic success powered by technology-driven businesses, then those businesses need to be understood for what they are. Not conflated in groups under meaningless terms like ‘the digital industry’, ‘the technology sector’, or ‘the knowledge economy’.

Tom Cheesewright