The UK’s capital city has just seen the launch of the eagerly anticipated London Technology Week, designed to boost the status of the capital as a dynamic technology cluster. On a European level, the self-promotion seems somewhat arbitrary as London has been atop the region’s technology space since the growth of the online market in the 1990s. However, globally, there is a sense the city is positing itself to challenge Silicon Valley. There is certainly no doubt that London corporate finance is booming, driven by a host of experienced sell businesses and cash-rich investors. Yet talk of challenging the US global investment hub is premature.
Some statistics, rolled out in time for Tech Week, do position London as among the world’s elite technology markets. A report by Oxford Economics claims there are 34,000 tech businesses in London, with another 11,000 to be created in the next decade, amounting to a total of 46,000 new jobs. Another report by two academics claims there are now more IT workers in London and South East England than in California.
These figures may be inflated but they do reveal the scope and potential of a finance-rich London hub. The city is certainly among the world’s top five corporate financing markets, though the attempt of London’s mayor and co to place it as a challenger to California is a little far-fetched. First of all, geographically a large number of the UK’s most successful start-ups have sprung outside of the capital. For example ARM, the microprocessor designer, was developed and grew up in Cambridge.
The statistic that brings London’s tech positioning into reality is a direct comparison of investments with Californian hotspots. Last week, the much-hyped San Francisco-based start-up Uber received £700 million of new funding. According to the British Venture Capital Association in 2012 – the most recent year for which they have figures – some £681m was invested in the whole UK technology sector.
Ultimately, comparisons with American centres of multi-billion investments do little but demonstrate the difference in the size of the two economies. Overall, London has an extremely positive outlook. The city is surrounded by two knowledge-hotspots in Oxford and Cambridge, while in relative proximity is the burgeoning tech environment of Bristol. Start-ups that grow outside of the capital are always likely to come there eventually for financing and human capital. If London is able to collect nationwide resources and utilise events such as Tech Week and hubs such as TechCity, the capital can rival global technology centres in specific niches. For example, the city has the ideal platform to become a global leader in FinTech innovation and online retailing services, two segments that come naturally to London. This would certainly drive more financing to the city from both US and Asian quarters.
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