With numerous technology accelerators and co-working spaces, it’s perhaps little surprise that London is often labelled as the next Silicon Valley, but how has England’s capital reached this status?
There’s an argument to be made that following the financial crisis in the UK there has been a new wave of entrepreneurial behaviour, with less reliance on traditional employment and business models. “Innovation has to come from a need,” Pedro Rochavieria, co-founder of Lisbon Challenge, said at last week’s Digital Shoreditch panel on taking ideas global. “Going through a crisis can be a great thing.”
And, although Rochavieria spoke about the Portuguese economy, it’s hard to disagree that the economic recovery in the UK has been aided by a boom of entrepreneurship.
“London has gone from being pretty sleepy when it comes to technology, to being one of the top three cities in the world,” venture capitalist Saul Klein said, citing the city’s talent and access to capital as amongst the reasons for this. In fact, the UK capital now boasts the most billion dollar companies after Silicon Valley and China.
It’s no surprise however, when you consider the UK’s progressive regulatory environment and incentives like the Seed Enterprise Investment Scheme, capital gains and R&D tax credits, which make it one of the best places in the world to launch a start-up.
Last year, Britain’s technology industry was said to be growing faster than Silicon Valley and London was tipped to become a ‘digital powerhouse’ of the sector. The study by South Mountain Economics showed London as a world leader in financial technology, employing more workers in the industry than New York City or San Francisco.
Another reason that London has become so popular with tech start-ups could be down to its potential to become a springboard into Europe and the rest of the world. Some 90 overseas tech companies decided to base themselves in London during 2013, including networking site LinkedIn and digital marketing group Solocal. As Tech City’s Gerard Grech noted in his state of the union session at Digital Shoreditch, “we’re on the doorstep of Europe”.
London also provides a good opportunity for entrepreneurs to test out their ideas. “If it works here, it is likely to export well,” angel investor Sarah Turner said in her lessons from bringing start-ups to the UK.
That, combined with the relative political stability and easy access to English speaking countries that London experiences, can make it a very attractive possibility to any start-up.