Leeds’ talent pool is a wellspring for scale-ups

Leeds is a sparkling outlier. A new study commissioned by Leeds Digital Festival and The Data City reveals that while the national digital sector has declined by 0.6 percent this year, the growth rate in Leeds is 9.9 percent. According to the Centre for Cities think-tank, it is one of only two large cities outside London with a low reliance on public sector jobs - and according to a 2022 Irwin Mitchell report, it is predicted to be the fastest growing city in the North in terms of job creation by the end of this year. Its status is reflected in venture capital flows into Leeds startups, which increased by a staggering 88 percent last year, from £153 million in 2021 to £288 million by Sept 2022. But what’s driving this success story?

Put that question to business leaders based in the city, and you’ll soon hear a word: Talent. “Leeds has always been a hotbed for great talent, particularly when it comes to engineering, problem solving and critical thinking,” says Adam Hildreth, founder of Leeds-based online risk intelligence company Crisp. “We have never struggled recruiting the specialist people we need, and that’s been a crucial benefit of being located here.”

That’s partly because the city generates plenty of talent itself. There are five universities in Leeds alone—nine in the wider region—and a study last year put Leeds in the top five UK cities for graduate retention. But Leeds also has a gravitational lure that keeps bringing in fresh talent, too. “Plenty of people want to move here, because they want a city culture but a countryside lifestyle,” says Hildreth. “You can live in the rolling Dales, but you don’t have to commute for hours to get into town.”

The results speak for themselves. Greater Leeds has a working population of 1.9 million people, the largest in the North of England, and its talent pool has a standout reputation across the UK. It is seen as having key strengths in investable sectors such as finance, healthcare, and data. “That has created a perfect breeding ground for start-ups and scale-ups,” says Hildreth. “You've got this great talent pool, but you’re not necessarily competing on salaries like you might be in London. Start-ups, frankly, can't afford to do that. And that has created a really nice culture of innovation.

One startup that has benefited from this is the EV charging company Zest, which has hired around 20 former Leeds University students. “The level of talent is incredible here,” agrees Robin Heap, the company’s CEO, “and there's enough like-minded people, who want to make a material difference to society, and to sustainability, and to the environment, that we as an organisation can attract and retain."" Zest—the only certified B Corp in the ChargePoint operations industry—is only two years old, but the company has already made a name for itself, signing a contract to install 2,500 charge points throughout the Borough of Hackney, the highest concentration of EV charge points anywhere in the UK. Heap adds that the organisation benefits from the workforce’s diversity. “That has also been brilliant for us. For an engineering business, we have a very high proportion of women in the organisation—that’s great for the company, as it means we get a really good mixture of opinions.”

Leeds’ talent pool has also engendered a marked shift in the city’s economy from which the entrepreneurial scene has benefited. In recent years, several major UK companies and government departments have set up shop in the city, including HMRC, the Financial Conduct Authority, Channel 4, and Sky. International tech giants have also started arriving, with multinational IT consultancy Cognizant and Australian tech firm PEXA both choosing Leeds for their UK base in the past year. “A lot of big players are coming here, because I think they've seen the talent pool and they want a piece of it,” says Hildreth. Indeed, when Channel 4 moved to Leeds in 2021, the company said it had been attracted to the youth and diversity in the region—especially in neighbouring Bradford, often cited as the youngest city in Europe. The Bank of England has also made plans for a Northern hub in the city, and although the timetable for this is now uncertain, the organisation specifically cited data science graduates and experienced specialists as a reason for choosing Leeds."

These new arrivals have in turn had a role to play in driving the city’s scale-up activity. They have started spinning out smaller companies: Take Infinity Works Consulting, now part of Accenture, which was created by former Sky employees. The new arrivals have also helped to raise the city’s profile, increasing investment and inspiring other businesses to headquarter themselves there. “Now Leeds is attracting such attention, it has had multiplier effects for the scale-up scene,” says Doug Baikie, HSBC UK’s Head of Corporate Banking North, Scotland & Northern Ireland. “There’s a real sense of momentum here.”

The presence of these large firms and government departments has played a key role in the story of digital consultancy Hippo Digital. “The Leeds ecosystem was very much part of why we’ve ended up doing what we do,” says Adam Lewis—he and cofounder Rob Coop were both working for NHS Digital when they decided they could do a better job of experience and product design than most of the suppliers they were working with. “We needed someone who could design customer experiences and then deliver a technical solution. At the time, we couldn’t find anyone that could do both.” They launched Hippo with a view to partnering with Leeds-based engineering companies such as Infinity Works and Answer Digital, for a client base that was initially “probably around 98 percent government”. The nearby presence of both NHS Digital and the Department for Work and Pensions’ digital hub led to one of their breakthrough early projects. “We pulled people from different government organisations to work together on short, sharp engagements around cross-government problems like getting Health and DWP to collaborate on getting benefits to people who needed them more quickly, like fit notes or benefits for the terminally ill,” says Lewis. “The proximity made a big difference, as we tend to work very directly, hand-in-hand with client teams. We put people into the team and deliver as a cohesive unit.” The company’s approach has enabled Hippo to compete successfully against much larger agencies, and the consultancy is now leading a consortium of Leeds- and London-based companies to deliver multiple projects for the NHS.

A trifecta of SMEs, incumbents, and venture capital has produced an ecosystem that a host of new networking initiatives have since aimed to galvanise. The city lends itself to such endeavours, says Lewis, who is looking forward to the tech community’s five-a-side tournament kicking off in a few days’ time. “Leeds is a big place,” he says, “but everyone kind of knows each other.” There are over 70 regular creative, digital and tech meet-ups in town, but the crown jewel is Leeds Digital Festival, the largest “open” tech event in the UK, with nearly 250 events and no charge for hosting or attending.

“We don’t separate official events and fringe events, and it’s all built from the ground up,” says its CEO, Stuart Clarke MBE. “We have everyone from the smallest start-ups to some of the biggest international tech firms hosting events, covering everything from coding data to health tech careers—and social events too.” He believes the city’s enterprise scene has a notably collaborative ethos. “What we see every year is companies who are normally competitors coming together to put on an event because they want to show the best side of Leeds. You know that expression ‘a rising tide raises all boats’? I hear that on a daily basis in Leeds.”

The Nexus innovation community

A further nurturing force for this ecosystem is one of the key talent wellsprings which feeds it in the first place. In 2019, Leeds University established the Nexus innovation community, a physical and virtual environment designed to drive collaboration, encourage idea generation and foster connections between enterprise and the University. Vet-AI, a technology company providing affordable pet care through an app-based platform, was its very first tenant thanks to a coffee shop encounter. “I was quietly having my latte, just building a business plan from nothing,” says Paul Hallett, Vet-AI’s CEO and cofounder. “I started listening in on a conversation about bridging the gaps between industry and academia, and how that could create the fuel for a new type of model. Our approach to building a tech business was to do it ethically, and in a scientifically robust manner, so we wanted strong foundations academically—so it was music to my ears. I chased them out the door and said, ‘We're in!’ We’ve been partners ever since.” Vet-AI takes full advantage of Nexus—“a heartbeat of innovation”, in Hallet’s words—and enjoys a number of different connections with the university and the business school, working across departments, and getting access to talent, from interns right up to PhD level. The relationship has driven considerable value: The company now boasts a clinical team of over 70 vets, spanning five continents, and 300,000 pet owners have downloaded its app, Joii Pet Care.

So what does Leeds need to improve further? For Hallett, it doesn’t need to change much, as it has strong leadership at the core of the ecosystem. “What do people see when they look at Leeds? They see connectedness and collaboration at the heart of the city. People working together for the greater good. Partnerships, innovation and, as a consequence, growth.”