Tech City: How London became a tech power hub
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The document outlines London's ambition to establish itself as a world-class tech hub, specifically through the Tech City initiative launched in 2010, which aims to generate £12 billion in economic activity and create 46,000 new jobs by 2024. Key drivers for success include access to finance, talent, and supportive government policies, alongside partnerships with prestigious universities. The report also highlights competition from global tech hubs like Silicon Valley and Berlin, emphasizing the need for London to leverage its unique strengths to attract entrepreneurs and investment.
Tech City: How London became a tech power hub
- 1. A CASE STUDY OF TECHNOLOGY GROWTH WARNING: This is a sample document created and is not an official document of London & Partners. Sources not included.
- 2. OUR MISSION: MAKE LONDON A WORLD CLASS TECH HUB
- 3. 3 A clear mission by the British Government Right now, Silicon Valley is the leading place in the world for high-tech growth and innovation. But there’s no reason why it has to be so predominant.… ! Here’s our vision for East London tech city - a hub that stretches from Shoreditch and Old Street to the Olympic Park. ! This is what local businesses are saying they need. What part can you play in making it happen?” I have to say: the response has been overwhelming. ! — David Cameron, PM, 2012
- 4. The TechCity Initiative By 2024! Set to create £12 billion of economic activity & 46,000 new jobs over the next 10 years from today • Initiative started in 2010 • Aimed at putting London as a central focal point for Technology • Government Appointed Eric van der Kleij to head up the initiative • Created three key initiatives: • Future Fifty Program for the top 50 companies • Tech City Cluster Alliance to connect with the rest of the UK • £1m Launchpad Competition • Supported by Financial Drivers including SEIS, EIS and R&D tax breaks • Corporation Tax is the lowest of the G7 and the G20 • Partnered with key universities including Oxford and Cambridge Timeline of Success 2010! TechCity Started June 2014! London Technology week! a series of more than 200 events taking place across the capital. 2011! Interactive Map of TechCity Sept 2011! Google sets up in Silicon Roundabout End of 2010! 85 Tech Companies End of 2011! 200 Tech Companies Jan 2011! CISCO sets up in Silicon Roundabout Sept 2014! 200 Companies! Sign to stay in London 4 2013! 53% of FinTech funded were in UK 4 Prime Locations Clerkenwell | Shoreditch | Whitechapel | Canary Wharf
- 5. Competitive Models TechCity is under global pressure to perform Silicon Valley California, USA 5 Berlin Germany Silicon Alley New York, USA Berlin has been the most talked-about (and talked-up) startup hub in Europe for several years. Successful exits incl.: Jamba in 2004 ($273 million/£180 million), Brands4Friends (€150 million/ £129 million) are evidence that Berlin can deliver. New York City’s ‘Silicon Alley’ is the digital hub that looks and feels closest to In- ner East London. Silicon Alley was originally a well-defined corridor in lower Manhattan along Broadway, from the Flatiron District up to SoHo; as in Silicon Valley is the world’s leading, and best-known high-tech region. It is a city-region running the length of the Santa Clara Valley in the Southern San Francisco Bay Area, from San Jose in the South to parts of San Francisco in the North (Joint Venture Silicon Valley, 2012). With companies like 3M, AMD, Apple, AT&T, Dell, Evernote, Facebook, Google, HP, IBM, Intel, Nvidia, and PayPal inhabiting the city, Austin is also known as the Silicon Hills. Silicon Hills London, Austin TX, USA Other models include Cap Digital (Paris), Santiago, Multi-Media Super Corridor (Malyasia), Tel Avi & Silicon Wadi
- 6. Success Factors Key drivers which helped create TechCity 6 Access to Finance Government funds & finance incentives make up the bulk of support The Patent Box Scheme Lowering Corporation Tax to 10% on profits from the development and exploitation of patents. SEIS & EIS Schemes Provides 50% and 30% respectively income tax relief for UK taxpayers investing in qualifying startups VC & Angels Offering VCs and Angels the ability to invest into startups with minimal risk and high potential exits creates a favourable financial market. Access to Talent Government support, top universities and access to Europe Visas Increasing the ease of Tier 1 & 2 visas has helped significantly to bring in top talent from across the world.! Access to top universities Oxford, Cambridge, LSE, LBS are all within reach of London making it a prime spot for bright minds of the future. Doorstep to Europe Europe is accessible in 1-2hours, enabling an influx of skilled talent to joint Tech City startups. Access to Entrepreneurs A clear strategy supports bright ideas from creative and driven individuals Entrepreneurs Attracting top entrepreneurs and fostering the right environment to utilise all these key drivers is critical to the success of TechCity as a whole. The Creative Hub London has always been a central creative melting pot of talent and creativity. Advertising, Film, Games and Music all come from London’s hub. Access to London Location, Location, Location - The right place to focus technology Easy Transport Access Offices are within walking distance; bike, bus and tube all connect TechCity to the rest of London.! High Speed Internet The UK Government is spending £853m on super high speed broadband to connect TechCity. Intel also gave access to super computers for startups and businesses alike. CoWorking Spaces Cheap office space with great amenities help positive work environments Executed Strategy A clear strategy was established from a single mission to tackle key issues and leverage London’s unique strengths to build a world class TechCity
- 7. Financial Capital for Tech Government schemes empower London to establish new businesses 7 The UK Government has fostered a financial environment which heavily favours entrepreneurs and investors alike to facilitate the establishment of startups and businesses. The result is a series of financial mechanisms which have been critical to the success of Tech City. The rate of R&D tax credit for companies with fewer than 500 employees has been increased to 225% The Patent Box Scheme Lowering Corporation Tax to 10% on profits from the development and exploitation of patents and certain other intellectual property in the UK has been introduced The Seed Enterprise Investment Scheme (SEIS) Provides 50% income tax relief for UK taxpayers investing in qualifying startups for the first £100,000 seed investment The Enterprise Investment Scheme (EIS) Offering 30% income tax relief for private investors – bringing the scheme in line with the relief available in contributions into venture capital trusts From Seed to Exit Numerous funds and Ventures ensure a steady flow of new Startups Leading ventures and investment firms have setup UK based funds to ensure a long term capital market. The financial support of London’s Finance Sector only facilitates deal flow, a key factor in London’s success. Investment Facilities include! • Venture Arms • Microsoft Ventures • Google Ventures • Accell Partners • MMC Ventures • DN Capital • Index Ventures • Balderton Capital 44% of the TechCity Pulse survey result aim to grow their business by 100% in the next 12 months £1b Invested in 2014 30% since 2013
- 8. Brains & Brawn Attracting the right talent is key 8 London attracts the best of the best in a number of fields. As a hub of international and local talent, it connects entrepreneurs, creatives, finance, law and services together in one location. ! Entrepreneurs From stars such as Michael acton Smith to Paulina Bosec, everyone is flocking to TechCity. The conditions for entrepreneurship in the UK are optimum: a recent Nectar survey found that 80% of young people in Britain now say they would like to start their own business in the next five years. ! Jobs Jobs Jobs! With already 15,091 employees merely in the top 50 tech city companies, Tech City is set to boom in 2014. Over 46,000 new jobs will be created the next 10 years making London TechCity one of the best places for future talent ! University Support! Recent research supported by Bloomberg suggests the tech and information sector in London, Southeast and East England – including Oxford and Cambridge – is growing faster than that of California.
- 9. Accelerators & CoWorking London features some of the best Accelerators and CoWorking spaces any city could image. ! Planting the Seed! From seed funding to later stages, Accelerator programs make up some of London’s best assets in delivering new jobs, businesses and growth potential year on year. ! Multiple programs fun, with specific areas of expertise such as L39’s Fin Tech speciality or Collider’s Marketing & Ad Tech focus. London has it all and provides the incubating space to empower young minds to develop the technologies of tomorrow supported by a free flowing market with the right environment to flourish. ! Sharing is Caring! Featuring over 65+ CoWorking Spaces, London remains one of the easiest and cheapest office space to rent for startups. ! It can host over 72,000+ seats, with office space, Skype booths, great connections and leading startups such as last.fm, dibbz, Facebook, Google, Cisco, Intel, SongKick, King, Mind Candy.! ! Not forgetting the great amount of events and networking that only help to foster a strong community of knowledge sharing and collaboration. 9
- 10. Backed by London’s official promotional company London & Partners is the official promotional company for London. Our specialist business network can help you: ! • Create a powerful business case for expanding to London • Find the best location • Recruit the right people • Create the perfect office • Build a network of partners • Enjoy London life
- 11. Who We Are Market opportunity + Ease of doing business + Rich and diverse ecosystem = Mission: Accomplished
- 12. 12 Your TechCity Model
- 13. 13 1 2 3 4 5 6 Government Drivers Financial Drivers Knowledge Drivers Human Drivers Infrastructure Drivers Agile Drivers ๏ Develop University Ties ๏ Cross Industry Projects ๏ Deregulation of Visa Application for Skilled Workers ๏ Initiative Strategy ๏ Scenario Planning ๏ Policy Development ๏ Committee Searching ๏ Location Scouting L&P’s key steps for your own TechCity Key drivers form the pillars of a strong foundation for your TechCity ๏ Flexible Policy Reviews ๏ Competitive research lead by L&P ๏ Regular Review of TechCity ๏ Access to International & Local Transport ๏ Cheap Office Space ๏ CoWorking Space ๏ Proximity to Capitals ๏ Access To Connectivity ๏ Drive uptake of talent ๏ Job fairs ๏ Support local initiatives (Ex: Silicon DrinkAbout) ๏ University Collaborations ๏ Tax Credit Proposals ๏ R&D Credit Proposals ๏ Invite High Net Worth Individuals (HNWIs ๏ Specialist Brank Divisions
- 14. 14 Join the future with London & Partners
- 15. business@londonandpartners.com +44 (0)20 7234 5800 www.invest.london @londonpartner