Last month, Chris Dymond attended another meeting of the South Yorkshire Mayoral Combined Authority (SYMCA) Business Advisory Group. In this post, he shares the main takeaways from each presentation and his own views about what this means for the tech sector. Read on for more details on the state of the regional economy, nuclear energy capabilities, plans for the Local Investment Zone, and why this will be our last SYMCA update.

Economic Update

Lewis Adams, Corporate Policy Officer at SYMCA, covered a lot in his usual policy update however a few points really stood out:

• SYMCA is introducing ‘Mayoral Priority Evidencing’ (MPE). These will form quick summaries of the evidence base for each economic sector and its impact on regional growth. This is intended to speed decisions and responses to funding opportunities. It wasn’t entirely clear but these may be internal to SYMCA only.
• 23% of the working age population of South Yorkshire is currently classed as “economically inactive”.
• Inflation is not receding, interest rates are going up again and the UK economy is not growing. However it also hasn’t actually fallen into recession either, which is surprising.
• SYMCA is introducing the ‘Better Business Challenge’ scheme, which is intended to reward South Yorkshire’s best employers. More details will be provided at a later date.
• There was also talk about an ‘Inclusive Growth Partnership’ but I don’t have details on this yet either.

Chris’ take: That economically inactive figure is shocking – it means 23% of everyone who could be working (i.e. is not actively looking for work or in education) is not doing so. According to the SYMCA economists, this is partly caused by people taking early retirement, but mainly due to poor health among 50-65 year olds. Most significant for us, however, is the introduction of the MPE system, meaning that we will need to make sure that the regional government has the right data and understands the tech sector properly via this process.

Regional nuclear/SMR manufacturing capabilities

We heard from Ian Nicholls, Group Technical Director at Forgemasters, about SMRs, which are Small Modular Reactors. They deliver about 20% of the output of a full-scale reactor.

Forgemasters have long made components for nuclear reactors, both full scale and those for nuclear submarines. The government has a pledge to massively increase electricity produced from nuclear fission by 2050 and both here and abroad demand for SMRs is significantly outstripping supply. There are currently at least 25 different designs vying for market position and very little standardisation of components.

Forgemasters are proposing the region leverage its assets in this area, such as the Nuclear AMRC, and make a significant investment in the local supply chain in order to design, manufacture and integrate all the significant components required for SMR production here in the region, and join the global market. This would also involve picking (or developing) a reference design.

Chris’ take: I think this is part of a wider and ongoing effort to work out how to position the region within the UK’s green economy – for a while it looked as if the hydrogen sector would be the main component, but it may now be shifting towards nuclear and SMRs specifically. It will take a lot of investment to build out the capability and we’d argue there are quicker and better returns if a fraction of that were invested in tech – but this really just means it’s on us and the wider tech ecosystem to develop credible investment opportunities for the public sector.

South Yorkshire Investment Zone update

Andy Gates, Assistant Director at SYMCA delivered this update.

South Yorkshire is one of the areas chosen by the government to develop an Investment Zone. These are geographic places (not necessarily contiguous ones) that can offer incentives for businesses to locate there such as National Insurance or Business Rate reductions, and/or infrastructure incentives such as reductions in stamp duty or land tax.

Additionally, these investment zones are to be focused around a primary economic sector. The Treasury is pushing heavily for the SY Investment Zone to be focused on advanced manufacturing in its broadest sense. Specifically fixing industrial problems and productivity. SYMCA emphasised that while this may be disappointing to some local industrial sectors, the region has to go where there is appetite and energy in Whitehall (a change of government in 2024 notwithstanding).

The geography under consideration for this covers the current Advanced Manufacturing Innovation District, plus potentially five other sites including Magna, Tinsley, Bessemer Park, the Sheffield City Centre ‘spine’ and Rotherham town centre. However, none of these sites have the potential to build large manufacturing capability – we can increase the density, but there’s little space for bringing in new major manufacturing investment, therefore bringing in other zones in Doncaster or Barnsley for instance is also on the table.

The Government is also interested in wider innovation ecosystem work: How does the public money produce more value to the wider region, do we have the right business support offer to attract the high value firms, do we have the right infrastructure, e.g. wet labs, research facilities, accelerators, etc.

The region needs the tools to land opportunities when they arrive in a couple of years time. It also needs to focus on transport links, inclusive growth and accessibility for our more deprived communities.

Chris’ take: This is set to be a major piece of the economic landscape in this part of the world, and we need to align our engagements with economic policy makers around it. The most significant aspects for us are: building out the city centre ‘spine’ aspects of the geography, as that’s where most of the tech companies and digital research is located; engaging firms that connect with the “fixing industrial problems and productivity” objectives; and making sure the incentives are suited to tech companies looking to relocate here and helping to communicate that to the market.

Institute of Export and International Trade (IOE&IT)

Paul Brooks, UK Manufacturing Trade Lead told us about the IOE&IT, which is an independent charity and membership body that has existed since 1935.

They provide links to the eight new ‘Freeports’ in England: Thames, Freeport East (Felixstowe), Liverpool, Humber, Teesside, Solent, East Midlands (Airport), and Plymouth) as well as to the other Investment Zones: 1 each in Scotland, Wales and NI, and 6 in England: Greater Manchester, Liverpool, South Yorkshire, West Yorkshire, the West Midlands and Tees Valley.

Chris’ take: I may be wrong, but this organisation appears to be aimed at exporters of physical goods, and consequently doesn’t provide much value to digital or SaaS firms.

Update on the Northern Research Group

Martin McKervey, Co-Chair of the Sheffield City Growth Board delivered this update.

The Northern Research Group is a group founded by new northern Conservative MPs in 2019 to pressure the government for greater investment in the north. They held their annual conference in Doncaster a few weeks ago. There was a Dinner the evening before hosted by the Chancellor; Keynotes from John Stevens MP, the chair of NRG, Jake Berry the founder of the group, and former chancellor George Osborne; and the conference was closed by the PM.

Key takeaways:

• The economy will remain a challenge for the next 2 years.
• Inflation won’t fall as quickly as the government intended.
• Devolution: MCA and Liverpool are moving towards more financial autonomy.
• Newcastle is positioning itself as a centre for Hydrogen and Wind.
• Education and skills panel covered the regional profiling from the Local Skills Improvement Plans.
• Brexit: there was acknowledgement of the Freeports but also that the current EU trade deal is not working and is a barrier to growth.
• It was clear that the 2024 General Election has already started. South Yorkshire trade representatives are also reaching out to Labour to seek to understand their policy approach to northern economic development.

Chris’ take: To me, devolution is the big item here – as the regional power of SYMCA becomes more established and focused on South Yorkshire, rather than the Sheffield City Region, what powers and funds can the region negotiate away from central government? How are they going to be governed in a way that improves democratic oversight and accountability? And what are the implications of that for the local digital tech ecosystem?

SYMCA Business Advisory Board and Mayor’s Economic Advisory Council

We heard again from Andy Gates, Assistant Director – Strategic Corporate Affairs at SYMCA and Neil MacDonald, Interim Vice Chair of the LEP.

SYMCA now requires an advisory board on economic matters – one that is advisory only and does not have funding to allocate. This is a departure from the Local Enterprise Partnerships (LEP) system that is being phased out by the government.

To this end, the Business Advisory Group will be transformed from an informal group to a formal body in September. It will also change its constituency with the intention that it becomes a mix of business representatives, with additional invited members. SYMCA would love to have a different set of businesses and voices around the table, from fast growing sectors, that have received investment and are exporting.

Representative bodies will be invited, but individuals must apply.

This new body will be called the Economic Advisory Council and be focused on “lifting SY’s horizons”, engaging nationally significant figures who can take the message elsewhere.

This meeting was therefore the last in the current format.

Chris’ take: It wasn’t clear from the announcement whether Sheffield Digital was included in the invited representative bodies or not (although my suspicion was “not”), so I queried this immediately after the meeting and received confirmation about a week later that indeed SYMCA is only inviting more ‘traditional’ representative bodies and have capped the numbers for the EAC at 12, meaning Sheffield Digital are not being invited (and neither are other newer bodies such as the Sheffield Property Association). However, SYMCA is very much interested in applications from individuals who represent significant tech firms in the region.

If you would like to apply, please contact me directly and I’ll put you in touch with the right person.