In times of economic gloom, “London’s Tech City sends a message about the whole of the UK" according to David Cameron. The idea is that the area is a blueprint for attracting investment around the whole country. The Government’s vision for London’s Tech City has always been to build on the existing cluster of companies that are located in East London to create a world-leading innovation hub for start-ups. In 2008 there were only 15 high-tech companies in close proximity of the 'Silicon Roundabout', which forms the heart of the city. But late last year it was announced that over 600 creative, digital and technological giants now operate here including Google and Twitter.
So, what lead to such growth? And what does it mean for London's (Britain's) tech industry and start-up scene?
July 2010 saw the opening of Tech-hub – an area providing low-rent, low-commitment workspace for hundreds of entrepreneurs. Since then many large internationals continue to promise investment to compliment support from the government:
- Cisco plans five years' worth of investment
- BT have offered communication
- Intel has promised serious hardware for the area's smaller firms
- Google is set to open a seven floored London ‘Campus’ that will form a type of support center for start-ups (in the guise of the provision of office space for firms that otherwise could not afford a year-long lease).
In late 2011, according to Eric Van Der Kleij, CEO of the Tech City Investment Organization the number of start-ups in the area spiked since the government's involvement. He noted that the amount has more than doubled in less than 8 months. And the growth is set to continue - the government is to invite 300 international start-ups, coinsiding with the Paralympic Games, to take part in the new ‘StartUp Games’ initiative. The event – which will be organised by the government’s trade and investment promotion industry, (UKTI) in cooperation with the Olympic Park Legacy Company – will see foreign start-ups compete to be recognised among the world’s highest potential start-ups.
What has interested the government about East London and Stratford and why have they decided to get involved? The (now) Olympic area has been depressed and the hope is that by encouraging new businesses to move here it will kick start a badly needed reinvention. And it seems to be working, perhaps a little too well - rents have been criticized, as the price of locating to the area has increased since ‘trendy’ tech companies swarmed in. If this escalates too far startups will find it difficult to thrive. But not just the start-ups, even the more established companies are seeing the expense – Groupon decided to pull out of its move to Tech City in late November due to it being too expensive. It is not just the cost though, there is a concern that if the area becomes too commercial it will lose some of it's uniqueness such as the coffee houses it is also known for.
Will it work? I think so. It's only a short distance to London’s finance center, there is apparently a super-fast broadband and WiFi connection, there is and will continue to be access to like-minded technology companies and a vibrant bar and social scene to top it off. What is not to like in London’s Tech City for new start-up and tech companies looking to innovate and grow.