London’s quest to lead Europe’s tech industry

With the UK Prime Minister’s announcement of a range of initiatives to boost the British tech sector at yesterday’s CeBIT trade show opening, David Cameron has given a strong indication of how his government sees the country as leading Europe’s tech industry.

One of the key parts of his announcement was a further £45 million funding for research in areas linked to the ‘Internet of Things’, taking total available for British organisations to £73 million.

Cameron is making a strong bid to make Britain – and specifically London – the centre of Europe’s technology sector.

Last November Networked Globe spoke to Gordon Innes, the CEO of London and Partners – the city’s economic development agency – on how the British capital is positioning itself to lead Europe as one of the continent’s tech sectors.

Stating Britain’s tech vision

In November 2010 British Prime Minister David Cameron set out his vision for London becoming the centre of Europe’s digital economy.

“We’re not just going to back the big businesses of today, we’re going to back the businesses of tomorrow.” Cameron said. “We are firmly on the side of the high-growth, highly innovative companies of the future.

Three years later London’s tech scene is booming with more than fifty incubators across the city and over three thousand digitally connected businesses in the Shoreditch district.

Gordon Innes, the CEO of the city’s economic development agency London and Partners, puts this down to a combination of factors including a young and diverse population coupled with being a global media and finance centre.

Building the roots

At the time of Cameron’s speech the cluster of tech startups around Shoreditch’s Silicon Roundabout area was already firmly established and the British government was acknowledging the industry’s successes.

“What we did, what the mayor did, what the government did,” Innes said, was to make sure that we removed as many barriers as possible to let the sector grow as rapidly as possible.”

Part of that effort involved business leaders, London & Partners, the mayor’s and Prime Minister’s advisers meeting on a regular basis to thrash out what the tech sector needed for the UK’s tech sector to thrive.

“There were changes to the tax credits for R&D and an important one was the Enterprise Incentive Scheme,” says Innes.

“Linked to that was a recognition of the need to link angels and high net worth individuals to be educated about the sector. It’s not just enough to balance the risk through the tax code.”

Another success for the UK startup sector was the British government introducing an entrepreneur’s visa that makes the country more attractive to foreign founders of startups.

Having built an community of tech startups, the city is now looking at how to grow the sector. “The big priority over the next few years is growing your business in London.” Innes says.

“Making sure you’ve not only have access to angel finance but also to stage one and stage two venture fund capital, you’ve got access to capital markets through new groups on the stock exchange and the AIM market.”

One of London’s big challenges is linking the city’s strong financial sector to the tech industry with a range of organisations like London Angels and City Meets Tech.

Uniting the community

A notable point about the successes of London & Partners and Tech City UK is the co-operation between the levels of government along with having a shared vision of where the city should sit in the global economy.

Having a unified, strong and consistent vision is probably the best thing governments can offer a growing entrepreneurial or industry hub.

“Government can’t create that but government can certainly support it or, if it’s not careful, can destroy it,” says Innes.

London is showing how to support a growing sector of their business community, other cities need to be taking note how they can compete in a tough global market.

About the author

Paul Wallbank is the founding editor of Networked Globe and has nearly twenty years experience of working in and reporting on computers, the internet and the future of our connected society.