The Rise and Rise of London’s Tech Scene
Tech Nation’s recent decision to name London as Europe’s ‘capital for tech collaborations’ will come as no surprise to those who have worked in the city. It has long been a mecca for the tech community — which is the main reason we decided to open a Primalbase space there.
The city’s importance to tech is also supported by the numbers. In the last two years, London has attracted billions in investment from venture capital. According to London & Partners, UK tech companies have received more than £5 billion in VC funding since June 2016. That’s more than France (£1.55bn), Germany (£2.15bn) and Sweden (£644m) combined.
London’s tech firms alone have attracted over £4 billion of investment — well ahead of Paris (£1.14bn), Berlin (£814m) and Stockholm (£542m). And even in the face of impending challenges to trade in the UK, this investment shows no signs of slowing down.
London’s future is still as one of the world’s premier tech hubs. We’ve looked at the history of the UK capital’s tech community, and why its success will continue.
London’s tech scene defied the global economic crisis
London’s tech scene rose from the uncertainty of the financial crisis.
In 2008–2009, rampant unemployment swept the city. Those with creativity and ambition sought new horizons, new opportunities. Fortunately, businesses too were in need of new thinking. They were desperate to cut costs and introduce new efficiencies, to rebuild and grow without being saddled with the sort of debt that caught so many out during the crash.
Both of these groups sought solace in tech, which seemed to offer a panacea to their problems.
One of the key benefactors of this was Old Street Roundabout — known today as Silicon Roundabout. The economic downturn also caused rent in the area to plummet, and startups saw their chance to build a community based in the area, with the likes of Last.fm music player and TweetDeck moving in. Silicon Roundabout today is no longer just the roundabout in Old Street — it extends from Moorgate to the outer reaches of Shoreditch.
The government also saw an opportunity. The sense of newness, rebuilding and optimism that tech represents seemed the perfect fit for a newly formed Conservative government looking to shed their reputation as stuck in the past.
David Cameron’s government introduced incentives such as the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) to help create an appealing ecosystem of generous tax and investment opportunities. They also brought in Exceptional Talent Visas to ensure an influx of top international talent.
Big tech is cementing itself in London
The buzz created soon attracted tech heavyweights like Google, who opened up offices in ‘Silicon Roundabout’.
For London’s tech scene to continue expanding, it needs more than continued VC investment. Startups and entrepreneurs need access to established tech companies — whether this is for collaboration, resources or funding.
London continues to excel in this area. Google’s move into Silicon Roundabout back in 2011 was followed by the opening of its Campus London buildings in 2012. In under two years, it had attracted 22,000 members, and created thousands of jobs.
Google has more ambitious new construction projects underway too. The search giant is currently building its new £1 billion offices at King’s Cross, which will occupy 650,000 square feet and house 7,000 employees.
And they’re not alone. Not to be outdone, Facebook has secured permission to construct similar offices right next door to Google’s. Apple is also growing its presence in London, this time in a symbolic listed building on the banks of the Thames. As part of Battersea Power Station’s regeneration, Apple has confirmed that it will be moving its headquarters there. The project is set for completion by 2021.
A wide pool of international talent
Recent research from Tech Nation found that there are more workers in the UK tech scene from outside the EU than there are from the common market. The UK government is keen to foster this, and continue easing the path of skilled tech workers towards the UK and, in particular, London’s tech scene.
The government recently announced an expansion to its special visa programmes. This has allowed more non-EU tech workers to gain employment in the UK.
London’s international standing is reflected in the outward-facing relationships of its entrepreneurs. According to the Tech Nation report, London is second only to Silicon Valley in ‘Inbound connections’, with 25% reporting having a significant relationship with two or more entrepreneurs in an ecosystem other than their own (to the Valley’s 33%). London’s geographical position is helpful, indicated by the fact that 33% of its tech customers are based outside of the UK. This trumps even Silicon Valley, with 30%, and Beijing with 7%.
A community spirit and a bright future
A recent study from London & Partners revealed that the number of digital tech enterprises in London will grow by a third by the year 2026 to over 61,000. The future is bright for London. International talent, investment from major tech companies in the long-term future of the city, a government committed to nurturing tech startups, a focus on the tech of tomorrow and a buzzing tech region in the heart of the city.
As important as all of this is, though, it is the spirit of the city’s tech community that really makes it what it is — the welcoming, international spirit that puts co-operation at its heart. It was this community spirit that really attracted us when we were looking for our next Primalbase space. It is somewhere that celebrates collaboration, somewhere the philosophy is the same as ours — a rising tide raises all boats. With this sense of community, the UK capital is well-placed to continue its leading role in technological development. Now we’re open in London ourselves, hopefully we can do our part to keep this spirit alive.
Our London office is now open to token holders! If you’d like to enquire about working from one of our desks, setting up your operations in one of our spacious offices, or would like to arrange a tour, email london@primalbase.com. Hope to see you there soon!
