Is East London still the future of the UK tech scene?
It has been a year since David Cameron took to the stage and pledged his allegiance to London’s tech scene by announcing the creation of a new technological hub to rival that of Silicon Valley. Today he unveiled an interactive Tech City Map plotting the 600 technology businesses in the East London area (screenshot above).
The area spanned by Tech City runs from Shoreditch out to Stratford. Some of Stratford’s Olympic Village will hopefully become home to global tech giants therefore connecting the loose wires needed to make East London a global player on the tech scene. Google, Cisco, BT and Vodafone have all had discussions about plotting up there.
So, a year on from the launch of Tech City, what has happened?
Richard Heap is a partner at Kingston Smith LLP, an accountancy firm whose office sits on the doorstep of Silicon Roundabout. He leads the firm’s media and technology group and his close involvement with a number of London-based tech and creative companies has provided him with unique insight into the growth of Tech City since its launch.
He recently released a report into Tech City’s progress. Here are some of the findings:
Tech City one year on:
- The number of companies in the area has tripled from 300 to 981
- A number of festivals have been launched, including Digital Shoreditch ( 3 – 7 May 2011) and Tech City Entrepreneurs Festival ( 14 – 19 November 2011)
- There are now at least 12 incubators and shared workspaces in the area including Tech Hub, The Trampery and Accelerator.
We asked Heap to give us his run-down of Tech City’s greatest achievements and biggest shortfalls over the last year, and an analysis of the key trends and activity that lies ahead for the East London tech scene.
LLB: So it has been a year since Cameron’s pledge to turn East London into a giant tech hub – what’s happening?
“Shoreditch has been a tech cluster for a long time and last year Cameron just jumped on the bandwagon of something that was already there. He made out that it was something that the government had done, which wasn’t true.
“But if you look at what has happened over the past year, it has come along. They have brought the world’s attention as well as London’s to the area.”
LLB: But aren’t Shoreditch and Stratford completely different creatures?
“The talk of the whole Shoreditch thing moving out east to Tech City is really all about getting the big companies in. Shoreditch and Tech City are two different things. Tech City is about big organisations, and some people would say that is totally unlike Shoreditch, which is about small companies, start-ups sparking conversations in cafes and bars. There’s a dynamism about Shoreditch that is unique.
“Where Tech City comes in is helping to attract more attention and bring the eyes of the world onto the area. I think it will help, and the two elements will work well side-by-side. But Shoreditch and Tech City Stratford will not become one. They will spark off each other’s strengths.”
LLB: How about the argument that these global companies will move in and buy up our start-ups, therefore denying Silicon Roundabout its own Google or Facebook?
“That’s something that does typically happen in the UK, and it’s something that James Dyson has referred to a lot. Our companies often sell out too quickly, before they have reached their worth. Having the big companies does increase that desire to sell out more quickly which is a major downside of having them move in. However I think the good outweighs the bad in this situation.”
LLB: And what about the rents rising and pushing out the start-ups?
“Rents are definitely rising – some say they have doubled in the past few years, but the area remains cheaper than Soho. It is definitely a potential impact that needs to be watched out for.”
LLB: What about the future of Silicon Roundabout?
“Every year we do an annual survey of digital businesses, which is what Shoreditch is all about. There are a lot of digital agencies that have sprung up now because one upon a time marketing services considered digital to be separate, and didn’t really have digital offerings.
“But things have changed – digital has integrated completely with ordinary marketing and the big companies are starting to realise that. We predict a lot of mergers and acquisitions in this area over the next few years.
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“Another area which will prove interesting to watch is the mobile arena. Many brands still don’t understand the power of mobile technology and what it has to offer and this is a huge opportunity for the agencies.”
LLB: So it will continue to thrive?
“There are so many of these businesses out these in Shoreditch, and the digital arena is one that will continue to see lots of activity. The new boys will keep coming in and we will maintain that constant circular activity.”