Ensuring the future sustainability and competitiveness of the Bristol and Bath FinTech cluster
Professor Jonathan Beaverstock from the University of Bristol School of Management and Stuart Harrison, the co-founder of FinTech West, have co-produced a report which identifies the competitive advantages required to promote the future sustainability and clustering dynamics of the Bristol and Bath financial technology (FinTech) ecosystem.
The report found that the Bristol and Bath FinTech ecosystem - consisting of start-ups, established firms, ‘wannabe’ new entrants, talent, and institutions like local government and universities - has the potential to become one of the United Kingdom’s and Europe’s leading innovative and dynamic clusters. This is based on the ecosystem developing as a strong geographical cluster where all participants need to benefit from their co-located agglomeration economies with each other. This includes their trade associations and institutions, “institutional thickness” (which binds together economic action with social and cultural communities of practice), and national and global connectivity.
The findings of the report are based on an appraisal of the competitive advantages accrued from the agglomeration economies or co-locational clustering of the City of London’s banking, financial and professional services, and FinTechs. According to Alfred Marshall (1890)[1], firms that co-locate in industrial agglomerations benefit from greater competitive advantages because of greater access to: pools of specialist labour; customers and specialist suppliers which reduce search and transaction costs, respectively; and knowledge creation, which enables spill-overs between firms, labour and institutions.
The project concluded that the future clustering dynamics and sustainability of the Bristol and Bath FinTech ecosystem as a leading national and global FinTech cluster is dependent on companies, stakeholders and institutions scaling up several main competitive advantages:
1. Access to national, regional and local funding;
2. A depth and breadth of talent pool and pipelines;
3. The establishment of accelerators and incubators;
4. The economies of scope, depth and distinctiveness of the cluster;
5. A depth of expertise and ‘institutional thickness’;
6. Access to an innovative market;
7. Global and national connectivity to established FinTech clusters in the U.K., Europe and the rest of the world.
Professor Beaverstock said: “To ensure the future strength and sustainability of the Bristol and Bath FinTech ecosystem, its parts must have the ability to function as a strong geographical cluster, realising the advantages of agglomeration economies, rather than as separate entities in an emerging or weak cluster.”
Stuart Harrison commented: “Delighted to work on this with the University and Jon in particular, who has significant knowledge from prior research as to what makes a cluster successful. As this is just the first stage of this collaboration, I look forward to expanding on the relationship and involving the wider community to build on the foundations created thus far.”
This project was funded by the United Kingdom’s Economic and Social Research Council from the Impact Accelerator Account Award scheme (ESRC IAA)[2]. The aim of the ESRC IAA scheme is to fund knowledge exchange and engagement activities led by an academic working closely with non-academic partners on projects to generate specific deliverables such as software, business process and policy recommendations. The University of Bristol is one of 26 research-intensive universities which have received ESRC IAA funding.
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Further information
Jonathan V. Beaverstock is Professor of International Management at the University of Bristol with research interests focused on banking and financial services clustering, talent management and mobility, and the competitiveness of financial centres. Jonathan gained his PhD from the University of Bristol and has held Professorships at the University of Nottingham and Loughborough University, and visiting Professorships at the National University of Singapore, Ghent University, Otago University and the University of Western Sydney. Jonathan is a Fellow of the Academy of Social Sciences, Royal Society of Arts and Royal Geographical Society.
Stuart Harrison, co-founder of FinTech West (https://www.fintechwest.co.uk/), is the main partner for this project. FinTech West, a not-for-profit organisation, was launched in 2018 to promote the growth of financial technology across the Bristol-Bath region, co-organised with Whitecap Consulting (www.whitecapconsulting.co.uk/) (Whitecap [2020] Bristol & Bath Fintech Ecosystem Report 2019-2020, https://www.whitecapconsulting.co.uk/wp-content/uploads/2020/02/Bristol-Bath-FinTech-Ecosystem-Report-2019-20.pdf).
Professor Jon Beaverstock, University of Bristol
[1] Marshall, A. (1890) Principles of Economics. London: MacMillan.
[2] https://esrc.ukri.org/collaboration/collaboration-oportunities/impact-acceleration-accounts/