Shalini Khemka, founder & CEO, E2Exchange on what UK’s tech clusters need to succeed
A report by Forbes recently has ranked London as the most influential city in the world. Tech City, London’s government backed tech cluster, has undoubtedly played a key role in this.
Centred on the £50m redevelopment of Silicon Roundabout, Tech City has fast become one of the most vibrant technology clusters in Europe: a report by Oxford Economics in July estimated that the area will generate £12 billion of economic activity in the next decade alone.
While all appears rosy in the capital, in last month’s Centre for Cities report, Lord Sainsbury estimated that there are more than 25 emerging clusters, based in regional cities such as Cardiff, Manchester, Newcastle and Birmingham, which are at risk of being overlooked and undervalued and argued that “the Government needs to support [regional tech clusters] and remove the barriers to their growth”.
The report suggested that these barriers include access to skilled and talented workers, lack of brand identity, and failure to establish tech networks.
London’s success as tech capital did not happen overnight: rather it was the result of recruiting skilled and talented workers, growing brand identity and developing of a close-knit tech ecosystem. If regional clusters are to hope to compete against the tech giants of the US, China and Japan, they must learn from London’s example in order to emulate its success. Only then can Silicon Valley grow to become Silicon Britain.
Tech City’s rapid growth is in no small part down to its major academic partnerships with Imperial College, City University and University College, London. These relationships have, and continue to, secure funding, research collaborations and extensive access to a pool of world class graduates. Unsurprisingly, the two most established clusters outside of London are based in the major university towns of Oxford and Cambridge. In particular, the Cambridge cluster is now home to over 1,500 tech companies with 1 in 5 graduates from the university going on to find work in “Silicon Fen”.
By contrast, emerging tech clusters in Newcastle, Sheffield and Manchester are not engaging effectively with leading local universities. With no official links between universities and local tech hubs, graduates from these areas are all too often packing up and moving to London. Entrepreneurs in this region need to follow London’s lead by working closely with Universities and tapping in to the local knowledge economy. Critically, this process needs to be supported and incentivized by the government.
These failings tie into a deeper problem –the fact that regional clusters are poorly publicised. Due to the absence of strong branding, many skilled workers, entrepreneurs and business owners are simply unaware of local tech clusters and the opportunities they offer.
Regional clusters must place a greater emphasis on creating a strong brand identity. Again, much can be learned from London. Pre 2010, London’s tech hub was a small, independent cluster enjoying gradual growth. The introduction of the Tech City brand gave London a global image, with Facebook, Cisco, Amazon and Google all keen to get involved. This, coupled with a Government led publicity drive and the ‘digitalisation’ of Old Street’s roundabout, was key in pushing the area to the next level.
For clusters outside of London to prosper, similar steps need to be taken. Branding is essential for capturing the attention of graduates and investors alike. Regional entrepreneurs and clusters need to develop a shared identity that the Government and its respective bodies can market on both a national and international level. The UK Trade and Investment authority brought international attention to Tech City: local governments must recognise, and capitalise on, the huge potential of tech clusters right under their nose.
Finally, emerging cluster networks are failing to connect with people and organisations effectively. While there is no doubt that Tech City benefitted from a pre-existing commercial infrastructure in London, extensive efforts were made to develop links with hubs both domestically and internationally. Now Tech City enjoys close links to a number of UK, American and other international clusters, including Silicon Valley. The resulting dialogue of information, ideas and human resources that these connections bring is enormous.
The potential for other UK clusters to develop similar links is fast growing. Plans are currently being discussed for a new Trans Pennine railway, HS3, to link the cities of Leeds and Manchester. This would slash travel times and encourage interconnectivity, hopefully catalysing a variety of other projects that have been suggested by the One North project.
Regional clusters must do more to follow London’s lead. Westminster and indeed local governments play a vital role in ensuring their success but start-ups nationwide must allay their fears and harness their ambition not only to ensure their own growth, but to support London as the UK enters a new age of high-connectivity.
Shalini Khemka is the founder/CEO of E2Exchange, one of the UK’s fastest-growing entrepreneur networks which she formed to provide a powerful voice for entrepreneurs nationally. Shalini, a former senior director at Deutsche Bank Securities, is a successful entrepreneur in her own right – established the first online bank trade finance company with three Deutsche Bank colleagues, which they subsequently sold. Shalini was previously an Investment Director at LDC, the private equity arm of Lloyds Banking Group, and remains closely affiliated to LDC through LDC’s headline sponsorship of E2Exchange.