In the midst of Brexit transitions and the global pandemic, it seems that London is witnessing nothing short of a technological revolution, with the industry documenting a record $10.5 billion in venture capital last year.
Tucked away in the trendy streets of Central and East London, hundreds of new fintech firms, renewable energy, and smart banking companies have decided to set up shop, pushing London’s existing tech scene to a new level. While the emergence of new tech firms in the capital may seem like an exciting new prospect for investors and new graduates looking to make their way in a growing industry, London’s tech boom in recent years is not as unexpected as people think.
Traditionally tech firms of all sizes have decided to go with the crowd and look to join some of the world leaders in communication, renewable energy, and social media in Silicon Valley, California – the tech capital of the world. However, in recent years there has been a notable migration of tech firms away from the foothills of San Francisco to new emerging tech hubs in Houston and most notably London. But is London really the new Silicon Valley, and what has driven this move?
The attractive surroundings of Old Street, Shoreditch, and new ‘industrial’ workspaces popping up in Hoxton has attracted a number of new and established businesses to the area. Although the development of this part of London has attracted many modern and stylish businesses to the area, it has also attracted several major companies to this previously unassuming part of London. Among the illustrious list of companies who have made East London their home is Google, who opened their Google Campus in 2012, around the corner from Old Street Tube station. Today, their workspace has expanded considerably from its original design and now serves to encourage and support the growth of digital start-ups and bring some of the best developers and creators together in the heart of London.
Joining Google in this migration, the online, tech, video, music, ‘you name it’ giant, Amazon, opened a new office space in 2012, designed to accommodate developers and designers working on the entertainment side of the business. Today the reach of this office space has expanded significantly to include a number of other major aspects of their ever-growing business.
While Google and Amazon are some of the most notable examples in this ‘tech revolution’ in East London, other major tech firms including Cisco, Intel, and Facebook have also opened up new creative spaces in the city.
While we may naturally focus on major players in the tech world shifting their focus towards London, arguably the main driving force for London’s growing presence is the continuous creation of tech start-ups.
London has dominated and continues to dominate the start-up revolution in the UK. According to a leading think tank focussing on Entrepreneurs in the UK, over 30,000 tech startups were launched in the UK during 2019, with over 17,000 of these calling London home. Although hampered by the global pandemic, this trend continued into and throughout 2020, as the demand for technology, entertainment services, and IT services increased substantially.
For many, the dramatic increase in tech-related startups induced concerns of whether this will over saturate the market or see a large proportion priced out of the market by some of the tech giants. However, to a large extent, this hasn’t been the case and the growth of the industry can continually be attributed to the growing quality and reach of the UK tech sector. This can be seen through the world-leading developments UK firms are making in industries such as renewable energy, accessible and cost-effective cloud infrastructure, and education.
Tech City Initiative
A large reason for the recent boom in London’s tech scene can be attributed to increased funding and the “Tech City” initiative launched in 2010, which boosted investment and growth in areas of London we recognise today as tech-hubs.
The increase in funding not only provided a significant level of confidence and importance of the tech sector in the UK economy, it most importantly allowed for the creation of specialist work and office spaces with state-of-the-art physical and digital infrastructure to support the growth of businesses. The creation of workspaces with secure and fast connections, cost-effective rent options and spaces that encourage creativity and cross-industry connections has created an environment for the tech sector in London to thrive.
What does the future hold?
With growing interest from venture capitalists from all over the world in the market, the future of London’s tech sector looks promising and the shift from Silicon Valley to London is set to continue.
While there is a sense of optimism in the future of the sector, it is important to note that the impacts of Brexit are yet to take full effect. However, the sector can take some level of confidence from how businesses have managed the working limitations that Covid-19 has presented.
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