Few places on earth have had more impact on the modern human experience than a small area towards the southern end of the San Francisco Bay, Northern California. The Silicon Valley is the iconic birthplace of some of the world’s most influential tech companies, from Hewlett-Packard to Google, Apple to Intel; the area has redefined how modern societies communicate, trade, work and play.
The major transnational corporations that thrive here use the area to develop their ground breaking products, drawing upon the expertise of world leading engineers, researchers, academics and marketers. Yet, it is not only home to well established global firms; there are in fact 51 new tech companies that open for business every month in Silicon Valley. Of these start-ups, three out of every four fail and many never attract funding beyond the initial stage. There are also 6,282 seed, or angel-funded, start-ups in San Francisco that have gone at least a year without raising a Series A round.
It must be conceded therefore that although the area has afforded some extreme prosperity, it is a harsh and intimidating landscape for those struggling to establish themselves. Unsurprisingly, many new tech companies have now taken their sights off the Silicon Valley. New, prosperous tech areas are cropping up around the world. An emerging European example would be the south of Wales, UK.
As any proud Welshman will tell you, industrial innovation is nothing new to the region. South Wales was in fact a focal point of the 19th century Industrial revolution, providing essential minerals such as coal to what was then a global superpower. Today, the area has re-emerged as a tech force to be reckoned with and is acknowledged as one of the UK’s top five fastest growing “digital clusters”.
In fact, digital businesses in the area saw increases of 87% between 2010 and 2013, compared to a UK average of 53%. And, in the last two years, 18% of new companies formed in the region were digital companies, compared to a UK average of 15%. The majority of these are based in Cardiff or Swansea and 98% expect their revenue to grow next year.
As a local resident with strong personal routes in the region, the social advantages of these developments are fantastic to see. According to a recent report published by the Welsh Government, employment in the sector is forecast to grow at 1.37% per annum up to 2020, over twice as fast as the average employment growth. Within Wales, Cardiff is currently one of the top 3 priority sectors with the highest average weekly earnings (£611), significantly above the figure for the whole economy (£539).
The social advantage of such a concentration of industry specialists is translating into commercial advantage; meet-ups, tech events, talks and conferences are all taking place with increased regularity, being used as a chance to chat, share thoughts and create business connections. Several major universities around the city are also offering a growing wealth of talent to the industry.
The industries that are prospering most in this environment are HealthTech, Data Management & Analytics, E-commerce, TravelTech, games development, FinTech companies and online security firms. Indeed, a recent report conducted by the Department for Business, Innovation and Skills found that the UK’s cyber security sector, worth around £2.8billion, is forecast to be worth over £3.4billion by 2017.
The scale of the operations taking place in South Wales may not compare to the Silicon Valley yet, but progress is rapid.
In the case of myPINpad, who deliver secure authentication via PIN for digital commerce transactions on mobile phones, tablets and personal computers, my business partner and I have strong personal roots in the South of Wales, but our decision to base the company in Cardiff was largely based on the lucrative and progressive opportunities that the area had (and has) to offer.
The support that we received from Welsh governmental agencies has been first class, while the ambitious community of tech companies has encouraged the business to expand operations into Canary Wharf and overseas to Australia and China.
Although our business now runs on a global level, we still conduct operations from the South of Wales and would encourage companies to begin the journey here too.[su_box title=”Justin Pike, Founder and CTO, myPINpad” style=”noise” box_color=”#336588″]myPINpad is an enabler of multi-channel and multi-factor authentication on unsecured electronic devices such as mobile phones, tablets and personal computers. The solution can be self-hosted or deployed as software as a service (SaaS) and delivers effective security with a user friendly authentication interface. Acting as a ‘bridge’ between existing and new technologies, the myPINpad solution utilises familiar authentication systems through the use of cardholder PIN, minimises client upgrade and integration costs, whilst reducing risk and fraud for acquirers, issuers, card schemes, merchants and processors.[/su_box]