Digital Manchester

By The Drum, Administrator

April 13, 2007 | 13 min read

In a flash of blinding publicity, as bright as the lights that will soon illuminate the surrounding area, Manchester recently won the much-hyped super-casino rights for the UK. However, the city’s not been as successful in all areas of local regeneration and development of late.

What is less widely known - although, arguably, it would have led to a great deal more benefits for the city’s businesses and residents - is that Manchester recently failed in the government’s Digital Challenge bid. The challenge was an opportunity to secure new resources to support digital development across the city and develop more innovative ways to use these technologies to regenerate the city and tackle the digital divide.

Yet, despite Sunderland eventually winning the Digital Challenge, Manchester’s digital aspirations continue unabated, developing at an astounding rate, fuelled by the thriving digital industries that operate in the city.

Since the first industrial revolution, Manchester has been a centre of business innovation. And this continues today, says Kate Drewett, chairman and creative director at Moonfish.

“The platform that the digital revolution has provided was always going to be capitalised upon by the city’s business and creative communities. The ‘get-up-and-go’ attitude in Manchester has created a cluster of independent agencies that are relatively free of the industry constraints that might apply elsewhere.”

There’s a vibrancy within the thriving digital landscape in Manchester that matches many of the cities worldwide which are at the forefront of digital growth. Los Angeles, Helsinki, Singapore - Manchester is moving up with the best of them, according to CEO of Tequila\\Manchester, Fergus McCallum.

“It’s partly to do with the strength of our historical roots - the first electronic digital stored-program computer was built in Manchester in 1948 and we can be proud of housing the National Archive for the History of Computing here at the University of Manchester. Couple that with the well-established creative talent in the city and you have the perfect mix to fuel the growth in the digital community.”

There are lots of digital firsts for Manchester, including the first Department of Computer Science at Manchester University in 1964 and the games company Ocean Software - who managed to secure the first movie licenses for games such as Rambo and Short Circuit.

“This technology expertise, homegrown talent and success has fuelled the growth of Manchester’s digital industry,” agrees Magentic North’s Janet Harrison. “Manchester is certainly not unique in its digital growth, but is well placed to embrace the growing industry.”

In Manchester, the creative industries are recognised as a key element of the knowledge economy. Creativity is extremely important to the NW economy with a cumulative turnover of £6.45 billion. And, for Margaret Manning, CEO of Reading Room, there is no doubt that the agency took this into consideration when it was looking to set up Reading Room Manchester three years ago. “There is an abundance of creative talent from the regional colleges and universities and the co-operative networks provide a forward thinking approach to collaboration both in training and business opportunities, which is definitely making the industry hub into one of the most envied in the UK if not Europe.”

Manchester was already unique in being the largest digital hub outside of London. And the announcements that Google and the BBC plan to relocate to Manchester only increase the city’s digital credentials.

Industry studies are predicting a sector growth in Manchester’s digital industries of 52 per cent between 2002 and 2015. However, for some, that might be a modest forecast. “If Code’s annual growth rate, which is 35 per cent YOY over the last four years, is indicative of the potential in Manchester then predicted growth figure could be much higher,” says Code Computerlove MD, Tony Foggett.

The BBC’s move to the City is focusing people’s attention and encouraging investment, “an increasing recognition that you don’t need to be in London to be the best,” says Foggett. “Larger agencies are beginning to recognise the growth potential outside of London, which is becoming quite crowded. Plus we simply have talent who just don’t want to live in London and love Manchester.”

However, this growth in Manchester’s digital industries is also being fuelled by the client.

Clients have seen the benefits of using digital channels over the last ten years. And, in the last two years the demands from clients for digital services has rocketed, according to Manning.

“Clients no longer need to be sold the benefits of communications online but regard it as key to successful communication both internally and externally. They are also seeing online communication channels as a more cost effective, productive and measurable way to reach audiences.

“As clients realise the benefits that the digital revolution can deliver, they are choosing to focus more energy, budget and time on the digital industry.”

This trend has been growing year on year; an 11 per cent share of overall advertising spend has taken digital spend ahead of radio and print, showing that clients are now taking the medium extremely seriously.

“We have closed our year in spectacular fashion with the second year of over 70 per cent growth,” continues Manning. “People are spending wisely, there is an increase in strategy and insight consulting.

“Companies are spending based on returns. They are willing to take the time to research and profile their audiences first, then develop specific campaigns.”

“Clients are partly driving the need to expand the services we offer,” adds Roberto Simi, managing director of Moonfish. “Sophisticated clients who are into their third generation of website or digital activities are savvy to the variety of solutions available to them and expect more from their agency.

“Digital agencies now have to cope with an ever increasing amount of skills and knowledge required to offer a full digital service. As such, agencies are having to invest more into training their own staff to cope with the skills shortage and multiple new technologies.”

However, many agencies find a significant number of clients often still regard digital as low value to their organisation, despite agencies spending large sums of time and money educating clients and pitching for work. And, while clients are investing more in their online strategies, the question remains; are they investing enough?

“In general probably not,” says Neal Andrews, head of DIGERATI\\. “But the signs are encouraging in many cases: “From our perspective, the evolution of online is becoming an ever-increasing part of our clients’ agendas. And even where our clients are yet to invest heavily in financial terms, at least they are recognising the need to learn and invest their time absorbing the online culture that surrounds their customers.

“Our work is therefore wide-ranging as clients engage at varying speeds towards embracing a digital relationship with consumers, putting user needs and experience at the heart.”

These days, even if a client does not know what exactly they should do, they do know that they need to place digital at the centre of their future planning, believes Code Computerlove’s client services director, Andrew Davenport. “Any agency responsible for advising a client on their communications strategy, who is not spending time planning digital into that strategy, needs firing.

“Most clients now arrive at Code with a mindset to develop a website and constantly invest in, test, measure and refine; test becomes the working cycle. The vast majority of clients employ the agency as the lead, or a core agency partner - an extension of their own marketing or IT function.”

Some clients, however, have been resistant to change where they spend their budgets. But with 20 per cent of consumer’s media time now spent online (according to the IAB, the time European consumers spend online has, for the first time, overtaken the hours they devote to newspapers and magazines) attitudes have changed. Digital is no longer a ‘new’ media, it’s an established media that is reaching consumers in new ways. And those that are just recognising this have big challenges ahead, says Magnetic North’s Harrison: “The trends we’re noticing are down to a more societal shift in how people interact with technology and brands in their day-to-day lives. The internet and other technologies are now just part of what people do and calling any of it ‘new’ media is really missing the point. Savvy clients react accordingly to these changes in the way people interact with their brands.”

To help Manchester continue to push ahead with its digital vision, Drewett believes that everyone now needs to unite behind the one goal... and that isn’t always easy.

“One problem is that digital and creative businesses build intellectual property, not assets. As such, they often add more value to other businesses than they do to their own. I’m aware of £68m investment funding that’s available in the North West. But the bodies that award these funds tend to not like creative businesses because they are people focused and they regularly grow and shrink in size to match the market demand. It’s difficult to invest in a business that provides it’s most visible returns for other business.”

And, according to Code’s Foggett, until recently the digital industry has, as such, been tremendously underinvested in. “Only now are institutions and investors recognising the potential of the market. Within the city, for example, there still isn’t a single full-time creative degree course for our industry.”

This is also a worry identified by Manning. Digital growth is occurring across the whole country, and, while Manchester does have a unique ability to capitalise on that growth, it will be important over the next few years that this growth is not limited by lack of resources, particularly talented people.

“Manchester does have a great infrastructure and good industry support, however support, particularly in training will be needed if it is to realise this vision. Major players such as Google and BBC could add to the skills shortage pushing agencies to move further afield in their quest for talent.”


Over the last 10 years, Manchester has consistently taken a lead in using new technologies in regenerating the city. All eyes are now on the city, and digital is a major part of that. New Media City in Salford, which will be home to large parts of the BBC, is already encouraging new digital and media companies to locate in the city, whilst the first Manchester International Festival in 2007, commissioning new work, is reminder of Manchester’s place as the “original modern” city. It is important to remember that although we have come along way, there is much to be done to improve the lives, education and prospects of the city’s residents. Many of our citizens are still on the wrong side of the digital divide and we aim to deliver a “digital dividend” for the city by emphasising the need for more citizen engagement, empowerment and capacity building – giving every resident and business in the city the opportunity to take hold of the advantages of new technologies.

Citizens’ expectations are changing, and new technologies are seeing a growth in “user generated content” and new kinds of business that would have been inconceivable a few years ago. The challenge is to make these opportunities available for all. By developing a digital strategy for the city, leading on our highly-praised bid to the government’s Digital Challenge, and encouraging the private sector to respond with innovative ideas on how we can make Manchester a highly-connected “IP-city” competing with the best in Europe, MDDA is helping to develop the building blocks to ensure the city will be “ready whatever.”

The city is changing fast, and that means helping its citizens to have access to good advice, and high quality services. In addition, we aim to help the digital and new media sector, through supporting the trade association Manchester Digital.

In terms of defining new challenges for information society technologies and policies, the most important one is about how we engage with citizens to ensure that they can become active producers of online content and new e-services rather than passive consumers of what is there already, especially through imaginative uses of social networking applications (i.e. “Web 2.0”) and user generated content.

Adrian Slatcher, Manchester Digital Development Agency.

MDDA is the agency of Manchester City Council responsible for developing a “digital strategy” for the city-region.

Manchester often makes claims to being first. As Manchester was the world\'s first industrial city, it’s the \"original, modern\" city, as adopted in the city’s new branding. Another often-quoted first is the invention of the world\'s first stored program computer. Another is one of the world\'s first attempts at supporting economic regeneration using on-line technology – back in 1991 before the invention of the world wide web. So perhaps Manchester can fairly claim to have been one of the world\'s first \"digital cities\" with a thriving new media sector growing since the early 90\'s. By \'97 the sector was big enough to support an industry awards dinner, an event that went on to become the Big Chip awards.

The awards offer an interesting view of how the sector has developed, and run by Manchester Digital, a trade association started by a small group of companies in 2001.

Manchester Digital’s central pitch is that by working together the companies in the sector can achieve more. It prides itself on its independence – it receives assistance from the public sector, but is not directly funded, and is run largely by volunteers from member companies. Both the association and the awards cover the whole of the digital sector, from new media agencies to infrastructure companies and ISPs.

Undoubtedly the existence of an existing network of forward thinking companies like these helped persuade the BBC that Manchester would be a good place to move its interactive department. And this move has, of course, had a huge impact on confidence in the city\'s new media sector. But until recently it was touch and go whether the move would go ahead, and yet the attitude of most new media players in the city was ‘great if it happens, no worries if it doesn\'t’. Maybe it\'s the longevity of the sector, or just another example of Manchester\'s famous attitude, but one has the feeling it would take a very big blow to stop the advance of Manchester\'s new media stars now.

Mike Ryan

Secretariat Manchester Digital and managing director, Idaho Technology


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