Number of new tech companies in the West Midlands jumped by a quarter last year

The figures, an increase to 2,797 last year from 2,230 the previous year, indicate that the region’s technology sector continues to demonstrate resilience amidst wider economic difficulties, as analysed by RSM UK, a foremost audit, tax, and consulting firm.

Helen Brocklebank, office managing partner, RSM Birmingham said: ‘It’s great to see such strong growth in the West Midlands’ tech industry, highlighting the various opportunities available for innovative start-ups to thrive in the region.

“The tech sector plays a significant role in the local economy, so if this momentum is to carry on, we need to continue building upon the tech ecosystem which enables these start-ups to grow. This involves providing certainty on innovation reliefs, supporting the development of critical skills and ensuring that funding is accessible to those that need it the most.”

The national statistics reveal that a total of 51,017 technology companies were established in the UK last year, marking a 22 per cent rise from 41,972 in the preceding year. Significant growth was observed in key sub-sectors, including software development, data enterprises, and IT consultancy services.

Every region in the UK experienced a growth in incorporations compared to the previous year, with the exception of Wales, which still saw the establishment of 1,150 businesses, representing a slight decline from 2022. In London, tech incorporations witnessed a 26 per cent increase from the previous year’s figures, amounting to 26,060.

Ben Bilsland, partner and technology industry senior analyst at RSM UK, said: ‘Our research is testament to the resilience of the UK’s tech sector despite global challenges.

“The rise in tech incorporations shows there is cause for optimism in this key industry. Whilst it’s impossible to ignore AI as a driving force behind UK tech incorporations, especially for businesses working in data, there will be other factors to consider. It is a vibrant and energetic sector that consistently supports early-stage businesses.

“However, the sector has, and continues to be, marked by lay-offs, so it may be that these members of the workforce have been confident enough to go it alone, thereby fuelling incorporation growth.

“The Government has an important role to play if this trend is to continue. Making valuable resources, including AI compute, accessible for universities and early-stage entrepreneurs is critical.

“Funding and policy changes, including innovation reliefs, that ensure a world-class tech workforce are crucial both in terms aiding education and skilled immigration. For those businesses working in AI, clarity on future regulation will assist the ability to forward-plan.”