Sister – Manchester’s £1.7bn innovation district has released a new report revealing the rapid growth of innovation in regions around the UK.
It also outlines the missed opportunities for national growth by not providing the support needed to supercharge regions outside the Golden Triangle.
While at least 80% of venture capital is flowing into London, Oxford and Cambridge, the report reveals that innovation regions like Scotland and the North West, supported by devolution, lower operating costs and closer integration between universities and industry, are far outpacing Golden Triangle cities as some of the fastest growing centres for innovation.
Bristol, Edinburgh, and Manchester are among the fastest-growing innovation economies, based on growth of innovation employment, outside London since 2019.
London has only grown 1% as a whole (combining all London boroughs together)
Set against the backdrop of a declining innovation economy, with R&D investment falling by £3.4bn since 2021, the report argues that the UK’s future competitiveness hinges on its ability to unlock, connect, and scale innovation across these growing regions.
Manchester now hosts more than 1,088 innovative businesses, the second highest concentration outside London, and is actively recycling local capital and knowledge through 92 internal grant and investor partnerships.
This is where regional investors fund local start-ups in the same city or where research institutions collaborate on shared R&D grants. This ensures that both money and expertise continuously circulate within the city’s own borders.
Manchester and the wider North West have emerged as one of the UK’s most significant innovation engines outside London, attracting businesses from across the UK and beyond.
For instance, research from JLL found that Manchester was the top destination for financial services firms leaving London, with operating costs around 30% lower than London.28
The region combines several structural advantages: a large population, strong university research capabilities, relatively low operating costs and an increasingly coordinated innovation ecosystem.
Manchester is now the most popular UK city outside London for starting a new tech business, with 28% of tech leaders ranking it as their top choice.
The North West is now home to 4,751 innovative companies, placing it among the largest concentrations of innovation activity outside the capital.
Manchester itself ranks among the leading UK cities in terms of both innovative companies and employment, ranking 5th in the UK for innovative company count (1088 companies) and among the top three locations outsideLondon for innovation employment with a total of 88,688 people reflecting the depth of its digital, advanced materials and life sciences base.
