The number of new technology companies incorporated in the East Midlands increased 38% in 2022, according to analysis of Companies House data by audit, tax and consulting firm RSM UK.
A total of 1,390 tech businesses were incorporated in the East Midlands last year, up from 1,009 the previous year. Sheetal Sanghvi, partner and head of innovation reliefs in the Central region at RSM UK, said: “It is great to see East Midlands at the top of the table with the biggest increase year-on-year.
“The region has always benefitted from a thriving technology sector, particularly in fintech and medtech. This is largely due to the quality of the local incubator hubs, universities and the scale of global businesses from which experienced individuals go on to build their own businesses.
“Like many regional cities, the cost of workspaces in the East Midlands is more competitive than the capital. For start-ups and small businesses tight on cash, this has been a huge factor when setting up their headquarters and is reflected in the numbers published.
“New businesses also tend to attract younger demographics and the region has a generous pool of young talent to hand. In addition, with many workers moving away from the bigger cities during the pandemic and post-pandemic, triggered by the rise in remote working, regions with lower costs have become an appealing option for tech workers.
“This is another key driver in the decision-making process for businesses when deciding where to locate their new business.”
Nationally, 46,474 tech businesses were incorporated in 2022, up from 38,240 in 2021. The total number of incorporations in 2022 is nearly double the 23,531 companies in 2020, demonstrating sustained growth in new tech incorporations year-on-year.
The data cements tech as an area of huge growth across the UK. All regions in the UK saw an increase compared to 2021, with London being home to the highest number of tech incorporations (24,783). Eight of the ten regions in the UK saw increases on or above 22%.
Ben Bilsland, partner and Technology Industry senior analyst at RSM UK, said: “Despite the obvious economic challenges, it’s been another strong year for the tech industry. Whilst it is no surprise to see London at the centre of new tech incorporations, growth across all regions outside the capital is further evidence of the UK’s thriving tech industry.
“There is clearly appetite from entrepreneurs to start up new, innovative businesses and become part of the UK’s booming tech industry.
“This crop of early-stage businesses will need support to scale. Access to funding will be crucial and the UK government will need to ensure that UK tech is an attractive place for both domestic and overseas investment.
“For many young innovative companies, R&D tax incentives are crucial cash inflows. For many, the recent changes to UK R&D schemes that reduced the amounts small companies can claim were not seen as a positive step towards supporting the early-stage ecosystem.
“Innovation requires a world-class talent pool and UK tech will look to both education and immigration to build their workforces. Support from our universities and schools to build skills in STEM subjects and emergent areas such as Artificial Intelligence will be essential. Clarity over immigration policy will be required to ensure a healthy inflow of tech talent to fuel growing companies.”
