Are niche accelerators a way for regional cities to get a slice of startup action?

The combined factors of a depressed economy and tech being sexy right now have led to regional cities around the UK asking how they can attract startups to their part of the world. While it would be crazy to think that every city outside of London could gain the prized mantle of being a successful technology hub, there could be one route that would work for certain cities – focusing on a niche.

That’s the route being taken in the northern city of Sheffield, where the new Dotforge accelerator was announced yesterday. The program will emphasise e-learning, telehealth and medical devices, as there is already a strong pool of existing companies and academic research in these fields within the city.

The accelerator is 50% funded by Creative England, a national development agency for the creative industries outside of London, while the remaining 50% will come from private sector businesses and investors. Interestingly, it has received initial pump-priming contributions from all of the Sheffield City Region’s eight local authorities.

The potential for successful tech accelerators in regional cities in the UK hasn’t yet been proven. Recent arrivals on the scene like Birmingham’s Oxygen Accelerator and Newcastle’s Ignite100 aren’t quite old enough to have shown the kind of graduate successes of established names in the US like TechStars.

That said, the local authority-backed Difference Engine accelerator in the north east of England succeeded in establishing a bunch startups that have stayed in region. That’s partly down to a contractual obligation as part of the accelerator (update at the end of this paragraph), but their location isn’t necessarily holding them back. Take Screenreach for example. This Difference Engine graduate now has a growing US presence and customer base, including a New York City office, and has big name partners in the UK like broadcaster Channel 4 on its books (see our recent interview with its CEO at IBC for more). All this despite being based hundreds of miles from London, in Newcastle. (Update: Screenreach (which now prefers to be known as Screach) CEO Paul Rawlings tells us: “We didn’t have to stay in the North East but it was recommended. However, we had already made the decision to stay as I am a big fan of the North and of the network we have built there.”).

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So, it’s not surprising that cities like Sheffield are looking to accelerators as a way of attracting startups. However, it seems wise to choose a niche for these accelerators. Generalised accelerators require a broad mentor base that it’s arguably a lot easier to attract in London. While there may be room for a few generalised offerings further afield in the UK, drawing on local specialist industries makes a lot of sense. Some cities have strong financial clusters, others have big media production bases; situating young startups that operate in those fields around these existing clusters and letting experienced industry leaders mentor them – and maybe even become their first customers – seems like a wise way forward.

Of course, accelerators aren’t the only way forward. The Northern Ireland city of Newry is exploiting its location on UK soil and proximity to the international technology hub of Dublin in Ireland to attract a wide variety of startups. In Manchester, a mix of approaches is being seen. VaultPad – a niche accelerator for the travel vertical – has recently been established, but the forthcoming TechHub Manchester (disclosure: I’m a co-founder, but it’s important to mention the project to make this point) will offer a home to a broad range of product-focused tech companies in a city that we very much believe can support them.

Whenever a new accelerator launches, I find myself asking “Is there really room for another one?” If cities play to their strengths and support their existing industries, there may well be room for many more.

Image credit: Saturns Stingray