Can London rival Silicone valley?
London is officially the most successful tech start up hub in Europe. It produces the largest number of tech start ups within the European Union by a considerable margin. London now boasts over 2000 tech start ups and employees around 48,000 in its increasingly impressive digital economy. While a significant part of this growth has unquestionably been driven organically by the diverse, bountiful supply of talent that London has long attracted. A good deal of credit, in no small part, is due to a number of policies carried out by the current government. Since around 2011, a concerted, and by all accounts, successful effort has been made to attract big players and even bigger investment! So far 2015 has been a record year for funding, as the capitals technology firms attract more venture capital financing than any previous year! Peer-to-peer funding is another factor that has facilitated the rapid level of tech start ups, with London leading the world in this respect.
This investment has been crucial to London's rapid emergence as global tech hub. While London has unquestionably always had the talent at its disposal, the funding gap has historically prevented promising start-ups evolving into major global players. With this influx of international capital has come a tremendous opportunity for the city. So far London start ups have secured close to £880 million in funding according to London and partners, with total venture capital investment fully expected to surpass £1 billion by the end of the year.
With more investment and talent in London than ever before, the likelihood that more British ‘unicorns’ - or $1billion dollar companies - emerge on the scene, is an exciting prospect. Since 2000, there have been 17 unicorns, a number that is fully expected to grow over the next decade. The UK is already leading the way in sectors like fin-tech and E-commerce. Undoubtedly one of the central factors behind London’s tech scene success is its ability to attract talent. A combination of its immense cultural pull as well as its unique (and fortunate) position of being geographically and linguistically aligned with both Europe and countless other developed nations in the world, means there is a huge pool of talent desperate to work in the city. Diversity is clearly a vital driver for success. It breeds innovation as companies are powered by a wide spectrum of creative ideas, experience and skill sets. If there is one area where London falls short in this respect, it is the fact that just over 28% of London’s tech companies employ no women at senior board level, a fact that clearly needs to be addressed going forward.
Another central factor that has helped cement London’s position as as a tech-start up giant is its incredibly diverse business eco-system. Its one of the few cities in the world which can boast being home to just about every industry that exists. For a tech company starting up, this provides the huge advantage of being close to whatever sector they need: government, finance, arts, media, health, education and more. London clearly has a bit of catching up to do before it can boast the sort of turnover Silicon Valley generates. It is clear though from the continued surge in investment that the capital receives, that investors are bullish on the City’s prospects, and with all the talent that London has at its disposal, you wouldn't bet against it.