Contributors
Once hailed as having the potential to add £5.7 billion to the UK economy in 2016, Northern business leaders operating in the tech space met to discuss how best to unlock the sector's growth potential. As part of CyberFest, Womble Bond Dickinson, alongside a host of tech experts and business leaders, aimed to tackle the issue head-on in an insightful roundtable.
Returning for its fifth year, the North East’s largest cyber festival CyberFest hosted a range of events in some of the city’s most iconic spaces throughout September. One of these conversations: ‘FinTech - What does the sector need from the North East?’ was held at WBD’s office based at the state-of-the-art Newcastle Helix. The roundtable discussion centred on the specific needs and challenges of the region, what, and who, needs to be involved to help fintech fulfil its potential and prosper and the role that cyber security needs to play in its growth.
The speakers gathered in person, connecting key industry players with other business leaders to explore cyber security from new angles, discover new opportunities, and bring fresh insights. The conversation was led by Paul Armstrong, managing associate at Womble Bond Dickinson specialising in technology, commercial and corporate matters and Wayne Bryant, Dynamo Fintech Cluster Lead. Alongside other Womble Bond Dickinson partners and associates, the roundtable contributors included additional members of CyberNorth, representatives from Tech firms and FinTech North, a senior cyber security lecturer at Northumbria University and other sector specialists.
CyberNorth is the cyber security cluster for the North East of England and works to support the growth and development of cyber security businesses and individuals within the region. Made up of cyber security businesses and influencers, users of cyber security services, academia, public sector and individual innovators, the community provides a hub of peer-led expertise.
Phil Jackman said: “In addition to supporting and encouraging the growth of existing cyber businesses and cyber security individuals within the region, we also aim to raise the profile of the North East cyber security industry, act as an innovation centre in developing high quality cyber security students and employees and help to tackle the experience gap of cyber specialists that appears to limit the growth of many highly skilled individuals”.
Recruitment: talent and retention - barriers to growth
A key issue highlighted early in the discussion was the lack of engagement with cyber security firms and talent within the North from both investors and other businesses. Joe Roche of FinTech North said: “The Northern cyber security industry is held back by geographical barriers and a lack of cross-country pollination, both which limit the traffic and available finance for the North East cyber security industry”.
Another issue facing the cyber security sector within the North East is recruitment. Despite there being approximately 5,000 cyber security students across the big four North East universities, many firms are struggling to attract new talent. A possible explanation for this was given as the post-pandemic shift in recruitment challenges, stemming from homeworking i.e., candidates can work for London firms with London salaries, remotely from the North East, meaning for Northern businesses, their pay offerings are not competitive in comparison; a trend which is being seen across multiple sectors and proving a considerable barrier to growth.
Staff retention was also identified as a potential barrier to the growth of tech firms, as unlike many other industries, moving frequently between jobs is often not perceived as a negative within tech and is in many instances encouraged within peer groups. This transient approach to careers within the tech space has significant implications for start-ups, the most obvious being high staff turnover and associated recruitment costs, alongside the implications when companies are unable to retain high quality talent; it can be a vicious and expensive cycle, particularly when the North East recruitment market is increasingly squeezed by the pull of competitive London wages.
Support for start-ups
Mentorship for start-up entrepreneurs came up as a key catalyst in supporting the growth of North East fintech start-ups. The group discussed mentorship for budding tech entrepreneurs encompassing business operations, leaving them time and headspace to focus on the bit they do best – focusing on all things tech. Event participants agreed that unnecessary costs are sometimes incurred during the day-to-day running of a fledgeling business, which having the experience and support of a mentor might otherwise mitigate.
In addition to the mentorship of entrepreneurs, the question was also raised around how businesses within the North East can mentor the next generation of cyber security talent within Northern universities. WBD’s Paul Armstrong said: “Cyber security students at North East Universities need more engagement from companies as their insight and support is invaluable for these individuals looking to break into the industry”. For start-ups one of the barriers identified was manpower, with many possessing an already limited number of staff, where losing even one employee puts considerable pressure on the business. Paul continued: “Another barrier observed for companies in the North East in terms of mentoring schemes was a lack of investment and access to finance, looping back to the issue of a lack of engagement with Northern fintech on both a national and global scale”.
The road less travelled
Paul Armstrong commented on the relationship between larger law firms and fintech start-ups, pointing out that : “For some start-ups, the prospect of approaching a large, international legal firm for advice seems daunting. Because of this, they decide to reach out to smaller firms instead. The issue with this is that larger firms are generally much better placed to invest time in a start-up, understand and service its needs, provide useful contacts, and in so doing add a great deal of value to the business.
