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Could Birmingham Really Be the Next Shoreditch?

Could Birmingham Really Be the Next Shoreditch?

Last week Birmingham took the fight to the capital. With London Technology Week underway, Business Birmingham took over Old Street Tube Station to remind the tech scene that the second city offers an affordable alternative. So could Birmingham really be the next Shoreditch?

Digbeth Creative Quarter Birmingham

Cheaper office rents for tech companies

At the heart of Business BirminghamΓÇÖs argument is the fact that rents in the second city are much cheaper than those in Shoreditch. TheyΓÇÖre certainly not wrong.

Average rents for serviced offices in Shoreditch start from £500 per workstation per month for mid-range space, and from £750 for Grade A space.

By contrast, businesses based in Birmingham can expect to find basic loft-style creative space from as little as £125 per workstation per month. Mid-range space is available from £200, while Grade A space starts from £250. In other words, a fraction of what it would cost to set up in Shoreditch.

Affordability is a strong starting point if Birmingham is looking to lure tech companies away from the capital. But what else does the city have to offer?

Gritty authenticity: BirminghamΓÇÖs Digital, Media & Creative Quarter

Digbeth is the hub for BirminghamΓÇÖs creative scene. At its heart youΓÇÖll find the Custard Factory, home to some undeniably hip space which is colourful, iconic, and every bit as hipster-friendly as anything Shoreditch has to offer.

Former industrial buildings ΓÇô including the BirdΓÇÖs Custard factory which gives the area its name ΓÇô have been converted into offices and studios for creative, media and tech firms. ItΓÇÖs currently home to some 500 companies, spanning everything from animation to PR, web development to film production.

You’ll also find vintage stores, cafés and soon, an independent cinema and theatre. Beyond the Custard Factory itself, Digbeth also offers startup-friendly coworking space within a converted warehouse setting. In fact, there are plenty of industrial buildings which have been, or are ripe for, conversion into business space, many of them adorned with colourful street art.

In other words, the area has that gritty authenticity which is gradually being eroded in Shoreditch as the high-profile developers and big companies move in.

Beyond Digbeth

Digbeth may be at the heart of it all, but Birmingham also has plenty of other options too, within easy reach of the Creative Quarter itself.

Even right at the heart of the city centre office rents remain reasonable compared with Shoreditch, and tech companies may find they can afford to be based in vibrant, upmarket locations such as Brindley Place, Victoria Square or Snow Hill. The latter location is home to a new Grade A business centre which is on a par with premium Central London space.

Further afield, tech-led companies can find space and support at Innovation Birmingham Campus which runs specially designed startup programmes. By contrast, the Hagley Road is home to a selection of more traditionally styled office space.

While these locations may not be part of the Creative Quarter yet, as BirminghamΓÇÖs TMT sector expands, the creative vibe is already spreading to other areas of the city.

Take the recent news that TCN UK, which specialises in workspace for small TMT businesses, has purchased the historic Assay Office. Once the development work is complete this will bring creative space to the Colmore Business District popular with legal and recruitment firms.

The creative scene

While it might be every bit as trendy as Shoreditch, BirminghamΓÇÖs tech scene is no imitation of the capitalΓÇÖs TMT hub. The city wears its Brummie credentials loud and proud. Take animation studio Yamination (a nod to the distinctive West Midlands accent) or the forthcoming Glastonbrummy music festival.

That said, the national giants are here too, from Asos to The Gadget Show which is filmed in Digbeth. Earlier this year, the BBC announced it will move its national centre for recruitment and talent development, known as the Academy, to Birmingham in 2015. It will be followed by The Space (a digital partnership with Arts Council England) and the launch of the BBCΓÇÖs Digital Innovation Unit in Digbeth.

Tech talent on a budget

For tech companies looking to recruit young, enthusiastic talent, average salaries in Birmingham may also have their attractions. Startups in particular may not have the budget to offer top London salaries (especially if theyΓÇÖre paying London office rents too); wage expectations in Birmingham are significantly lower.

According to TotalJobs.com, the average salary for a web developer in London is currently £42,500 (with a range of £37,000 to £52,500). Compare this to the West Midlands, where the average web developer can expect to earn £32,500 (with a range of £27,000 to £37,500).

From an employee’s perspective, while wages may be lower, so too is the cost of living. The average cost of a pint in Birmingham is £2.58, compared with £3.65 in the capital.* Meanwhile, a one-bedroom apartment in the West Midlands can be rented for an average £443 per month. Compare this to Hackney, where average rent on a similar property is £997** per month – more than double the cost.

For employees this means more disposable income and a chance to enjoy more of what the second city has to offer.

A question of scale

Could Birmingham really offer a tech scene on the same scale as Shoreditch? officebroker CEO Chris Meredith believes so and points out that ten years ago, when Thames Valley was the place to be for tech firms, no one could have predicted Shoreditch would become the next tech hotspot.

Availability of space in Birmingham, says Chris, is a key factor which will enable it to grow: ΓÇ£From old factories to housing estates, Birmingham still has plenty of properties ripe for development into creative and tech space, as well as many brownfield sites in surrounding areas which could become whole business parks if the need arises.ΓÇ¥

By comparison, the narrow geographical confines of London and the high demand for space from a wide variety of business sectors mean that the scope for further development within Shoreditch is comparatively restricted.

With the supply ready and waiting, the question is whether Birmingham can create demand among the creative and tech industry for this surplus space.

According to Chris, there are a number of infrastructure decisions currently under consideration by UK Government which will determine the extent of BirminghamΓÇÖs potential.

ΓÇ£HS2 has been the hot topic for some time now, and whether this ever comes to fruition or not will have a huge impact on Birmingham, by improving connections to London, Manchester and Leeds. However, there are also outstanding questions surrounding the UKΓÇÖs airport infrastructure. Will Birmingham get another runway or not? The city is currently restricted as an international destination by its relatively small airport, but the addition of another runway could open it up and make it accessible to many more locations around the world.ΓÇ¥

Birmingham vs. Shoreditch: making the business case

For Chris, it isnΓÇÖt a case of making the business case for Birmingham; itΓÇÖs a question of re-evaluating how much value a Shoreditch address can add to your tech business.

ΓÇ£When weighing up your options, what you need to ask is whatΓÇÖs your return on investment going to be in Shoreditch? What does your business get from being in Shoreditch that it doesnΓÇÖt get in Birmingham? Birmingham has the space, it has far more affordable office rates, a central and easily accessible location; it even has the talent pool to support tech businesses.ΓÇ¥

ItΓÇÖs a compelling argument and one which has already convinced Asos and the BBC to move to Birmingham. How many tech companies will follow suit?

What do you think ΓÇô could Birmingham be the next Shoreditch? Share your thoughts in the comments.

 

*PintPrice.com; **Gumtree.com

(Image: “Digbeth Birmingham UK” by brianac37, licensed under CC BY 2.0)

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