BOURNEMOUTH, England — Long stretches of pristine beaches and dramatic seascapes lovingly bracket this city of 191,400 on England’s south coast. Unsurprisingly, it grew into a spa and resort town in the 19th century. And that legacy lives on: it’s still best known for its throbbing nightlife, which mainly attracts a younger crowd — casinos, resort hotels and clubs line its beachfront — and its large population of retirees. A mayor once joked Bournemouth is where “hedonism” and the “blue-rinse” set peacefully coexist.
But now a new group of denizens is joining Bournemouth’s mix of partiers and pensioners: techies. Because the city has quietly morphed into a high-tech hotspot.
A new report says that the value of tech companies in Bournemouth and Poole (its twin city to the west — the two towns essentially blend into one another) jumped 68 percent — to $508 million — from 2010 to 2014. The report from Tech City UK, a government-funded entity created to bolster the country’s burgeoning technology sector, follows one from last year that said Bournemouth/Poole was home to the UK’s fastest growing tech cluster — local startups grew by a sizzling 212 percent from 2010 to 2013.
Tara Flynn, 30, co-founder of Ratio, a software company that operates Choose Wisely, a price-comparison website for financial products, says the reports upended preconceived notions. “There’s a lack of realization in London and elsewhere that Bournemouth is so buzzing,” she says.
Bournemouth’s hi-tech surge is a microcosm of a countrywide boom in digital startups. Britain’s tech sector is growing 32 percent faster than the rest of the economy, generating revenues of £161 billion ($233 billion) and creating jobs 2.8 times faster than all other sectors.
[READ: The UK seen as a strong country for entrepreneurship]
And most of the action is taking place outside of London. Seventy-five percent of tech companies are located in regional cities like Cambridge, Oxford, Manchester and, yes, Bournemouth.
Tech clusters tend to form around universities, and Bournemouth is home to two well-regarded schools: Bournemouth University and the Arts University College at Bournemouth. Tech City found that 86 percent of local companies cited the schools as being one of the area’s main benefits. They’re also a source of talent beyond the city — half the employees in Britain’s top-rated animation industry are BU computer animation graduates. But Bournemouth itself is the main beneficiary of the two schools’ talent pool. “If you’re a good company, it’s easy to build and hold on to a team here,” says Duncan Cook, 39, CEO of app developer 3 Sided Cube.
[READ: Millennials rank the UK high as a country]
Cook is an Arts College alum who opted to relocate back here when he started 3 Sided Cube as a one-man operation in 2004. “I thought to myself, ‘That was a bloody nice place to live,'” he explains. His company now employs 25 people, is profitable and has clients ranging from American Red Cross to Boots, the UK’s largest drugstore chain.
Of course, there are downsides to being a 2-1/2 hour drive from London: mainly, a lack of access to large amounts of finance. To be sure, the money crunch is a national problem. Several studies have found that the inability of companies to raise the money needed to scale up has been the industry’s biggest hurdle, despite an explosion of venture-capital investments that reached $3.6 billion last year, a 70 percent jump over the previous year. To help breach the finance gap and attract more VC money, several new accelerators are being launched in Britain, including a small one in Bournemouth.
But so far, most of the money available here is small change, mainly angel investments and some early seed rounds. “You do have a lot of wealthy people here, but most of them are retired,” Cook says.
And big VC investors aren’t inclined to move to Bournemouth. They tend to want to be personally involved in the businesses they invest in, which can limit the geographical spread of cash to London and nearby environs. So far, Flynn’s Ratio has succeeded by self-funding its operations. But Flynn admits, “We want to grow internationally, and we may need a big cash injection at some point, but we won’t find it in Bournemouth.”
That’s a future worry, however. For now, the 30-year-old entrepreneur has no desire to say goodbye to Bournemouth’s growing community of startups. “Its location is the best thing,” she says. “There is an aspiration here to make it one of the most well-known digital hubs in the world.”
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In England, Hi-Tech Mingles With Tourists and Retirees originally appeared on usnews.com