U.S. Markets closed

Does Southampton have what it takes to be a leading tech hub?

Ellie Zolfagharifard
Professor of Silicon Photonics Graham Reed Director Professor Sir David Payne and Deputy Director David Richardson at the Optoelectronics Research Centre University of Southampton in Hampshire  - Christopher Pledger

US troops waiting to sail for Normandy in 1944 have left their mark in Southampton. More than 100 of their names are etched into a 62ft brick wall at Western Esplanade - a reminder of the city’s crucial role in D-Day.  

Today, that wall is crumbling, as are many of the concrete post-war buildings that were erected following the devastating Nazi air raids on the port city during World War II. 

“You know, the old joke that they tell about Southampton is that what the Luftwaffe failed to achieve, the planners succeeded,” says Sir David Payne, who has lived in the city ever since studying at Southampton University in the mid-60s. 

The 75-year-old is, in many ways, a true Sotonian; brutally honest, quietly passionate and global in his outlook. He is also one of the city’s most famous residents, credited with developing the world’s first practical optical fibre amplifier.

The technology forms the backbone of the internet as we know it today. It is used in optical fibres to boost light signals, allowing vast amounts of data to travel at rapid speeds all over the globe.

“It’s no idle boast when we say we changed the world”, says Sir David, speaking about his work with colleagues Graham Reed and David Richardson.  “We claim to have invented what makes the internet work,” adds Dame Wendy Hall, another of the city’s leading technologists, and director of Southampton University’s Web Science Institute. But that’s not the first thing that people usually associate with the city.

Southampton, which has a population of just over a quarter of a million, is still trying to shake off its reputation as a neglected port. Behind its brutalist concrete walls, however, a change is slowly taking place - and it seems its rich history in innovation and technology is beginning to inspire a new generation of entrepreneurs.

Starling Bank's newly opened office in Southampton Credit: Christopher Pledger /The Telegraph

“Southampton is an interesting place,” says John Mountain, Starling Bank’s CIO, who has recently opened an office on the city’s waterfront in Town Quay. “It doesn’t somehow make the news. But there’s a load of tech talent down here.”

In fact, the city currently ranks in the top five tech superclusters in the UK, ahead of Cambridge and Bristol, according to the latest report by estate advisors CBRE. Between 2010 and 2016, high-tech employee numbers grew by 25pc, and in 2017, turnover in the city from digital tech businesses was £2.1bn. The port has certainly shaped attitudes in the city.

Dame Wendy believes that this is down to the University and its strengths in science, technology and engineering. In the last two decades, it has spun out 27 companies, four of which have have floated on London’s AIM with a combined market value of £180 million.

Ben Clark is the man partly responsible for those figures. He runs the Future Worlds incubator on campus, helping mentor students and grow start-ups that he says stand “shoulder to shoulder” with those in Silicon Valley.

His frustration isn’t the lack of available talent, but the pessimistic attitude of British investors. “Whenever I’m in Silicon Valley there is a sense of hope is just palpable,” says Clark. “There’s this sort of enthusiastic optimism that maybe just maybe, you’re the next Zuck, or maybe just maybe, this could be enormous. I think, often in the UK, we start in the opposite direction.”

Despite the differences in attitude, he believes Southampton is, in many ways, better than Silicon Valley. For one thing, he says, you’re not stuck in traffic every day to get to work, London is just one hour away and there is a far better work-life balance. There’s also more opportunities to grow a start-up.  

“The cost of talent is also a fraction of what it is in Silicon Valley. You get a software developer two years out of university in Silicon Valley, and they want a starting salary of over $100,000 a year. Well, that’s off the chart compared to what we pay for the same talent here, or better.”

Clark is now on a mission to inject some US-style optimism into his students - and so far, it seems to be working. Joshua Steer, for example, has built upon an undergraduate project in prosthetics to create spinout company Radii Devices. 

Martin Nunez operates a Optical Fibre Drawing Tower at the University of Southampton  Credit: Christopher Pledger /The Telegraph

The company’s software helps clinicians predict the pressure between a limb and a prosthetic to help create the perfect fit. Through Future Worlds, 25-year-old Steer has raised £180,000 in funding to commercialise his technology.

“What really attracted me to Southampton in the first place was the University and the really strong engineering side. Over the last few years, it’s felt like a really exciting place to be. Coming from London, I have quite high standards,” he laughs. 

Another success story is spin-out AudioScenic, which recently raised £500,000 to develop technology that delivers 3D sound without headphones. Its system works by tracking the location of listeners through a camera, and then adapting sounds to create an immersive audio experience.

Away from Future Worlds, major tech companies have invested in the city. IBM, for instance, has a base, alongside the likes of Ordnance Survey, Sparkbox, Senseye and Etch. Dame Wendy also highlights telecommunications company toob, which has recently expanded into the city.

“That’s a huge boon for us as they’re all ex-Vodafone people, and they are doing 5G installation. It’s certainly an indicator that they see 5G as something this city is going to want.”

But does Southampton have enough to provide its home-grown talent from moving to London or Silicon Valley? Mountain seems to think so. “We’ve had a couple of people already who I thought were pure Londoners. That was their thing…when we opened the Southampton office, thinking we would do predominantly local recruitment, they asked to transfer down.  “One person has described it as the best decision they’ve ever made.“