As Tech City UK turns five, CEO Gerard Grech takes stock on how far London and the UK have come — and what needs to happen next
The first spark of the idea that would go on to become Tech City, surfaced on the last night of a UK trade mission to India in July 2010. At a British Government-hosted reception in Delhi, Matt Webb, then CEO and cofounder of design consultancy BERG, struck up a conversation with Rohan Silva, then a senior special advisor to the prime minister.
Their chat soon turned to London and the best way to get the small cluster of startups that were scattered around Old Street to take off, and ultimately become a viable ecosystem. “Matt said there [wasn’t] a Silicon Valley-type ethos in Old Street, where you can all come together,” Silva told Wired magazine at the time. “So he asked for our help.”
A few months later, the Prime Minister delivered a speech in which he declared that “something [was] stirring in east London”, which could one day “be one of the world’s great technology centres”. Soon afterwards the Tech City Investment Organisation, as we were then known, flickered to life.
Fast-forward to today, and with the CEO baton passed from our founder Eric van der Kleij, via Joanna Shields, to me, Tech City UK’s remit has expanded. We’ve evolved from supporting and promoting east London’s tech scene to helping the UK’s digital economy as a whole via business lifecycle programmes, digital skills and thought leadership and advocacy.
So – as we pass our five year milestone – now seems the ideal moment to reflect on how far we have come, and on what needs to happen next…
- London is now indisputably a global technology centre; the digital capital of Europe.
London, and the UK’s, rise over the past five years has been nothing short of meteoric. Our internet economy, as a percentage of GDP, continues to lead the G20, and as investor Saul Klein argues here, the UK is the largest market other than US and China for all major tech companies. London is the top city for Facebook and Twitter users and a top three customer base for enterprise and infrastructure tech.
A large number of tech giants, including Salesforce, Google and Amazon have picked the UK as their European or international HQs, while Britain is now home to at least 50 tech accelerators. Five years ago, according to one tally, there were fewer than 100 startups around Silicon (Old Street) Roundabout. Today, there are estimated to be some 3,228 registered companies per square km in the EC1V postcode alone, while last year saw a record high for investment in UK startups of $3.6bn.
- Government gets it.
Government and innovation don’t always go together in people’s minds. But from the transformational effect of the Government Digital Service (GDS) to the introduction of early stage investment policies such as the Seed Enterprise Investment scheme (SEIS) to our own Tech Nation Visa Scheme, I can say that this government really does get tech. It has placed its full weight behind transforming the UK into one of the world’s best places to launch a tech startup. And no wonder – according to Tech Nation 2016, the digital tech economy creates jobs 2.8x faster than the wider economy and is growing 32% more rapidly over the last few years.
- It’s now ‘aspirational’ to be a digital entrepreneur.
Tech has permeated the wider culture. Speak to today’s school leavers or university graduates and going into digital startups has become an acceptable career choice. Five years ago, much of the best talent would have joined large corporates or a City firm. Now growing numbers are turning to digital entrepreneurship.
- We’re open about the startup failure rate (which is why we need role models).
Now that we’ve hit a generational high point in terms of creation of new startups in this country, we are more open about the fact that not every entrepreneur makes it. Many don’t survive, which is why we need role models for the next generation of entrepreneurs to look up to. That’s one of the reasons we launched Future Fifty, to support the UK’s leading 50 growth stage digital businesses. In the last 20 months, participating companies have collectively raised 36 funding rounds, with a combined value of £1.2bn, with a further £1.18bn raised from four IPOs, including Just Eat and Zoopla and 9 acquisitions, including Unruly (News Corp), SwiftKey (Microsoft) and Onefinestay (Accor Hotel Group).
- Scaleups matter as much as startups.
Startups may attract much of the buzz, but scaleups matter as least as much. One of our initiatives here is Upscale, a six month programme focused on rapidly scaling tech companies such as Zesty, Touch Surgery and Show My Homework, who are offered direct access to leading mentors such as Skype and Atomico’s Niklas Zennstrom and Techstars co-founder Brad Feld.
- Our annual Tech Nation report has helped us learn how every UK tech hub has its own distinctive DNA.
The UK needs tech diversity and Tech Nation 2016 data has made us immeasurably better informed about cities outside of London than we were two years ago. We want to help support a network of digital excellence, with key cities known for key specialisms, from cyber security in Belfast to gaming in Liverpool and Newcastle, and FinTech in Edinburgh to applied analytics and genomics in Cambridge. The Digital Powerhouse report from Tech North has shown specialisms in gaming, advertising and marketing technologies across the region.
- The Tech Nation Visa Scheme opens doors to global talent.
We’re one of five ‘Designated Competent Bodies’ appointed by the Home Office to review applications under the Tier 1 Exceptional Talent Visa route. A startup or scale-up may come across a dazzling data scientist from the University of Beijing, and now they have a way of bringing them into the country – and keeping them here. Numbers were low at the beginning, but this has changed and the figures have risen significantly since. The reality is that the tech industry is developing at such velocity that there’s a constant gulf between the exceptional skills companies require and the talent available at any given moment, which is why the scheme is so critical for the future of the UK’s ecosystem.
- Tech North is helping to turbo-charge growth in the North of England.
The claim that London has hogged the tech limelight is doubtless a fair cop, but Tech North’s mission is partly to set about redressing the balance. From the Tech Nation 2016 report, we now know that across the North of England the digital economy employs more than 280,000 people, with deep and growing expertise in sectors such as games (Liverpool), health-tech (Leeds), ed-tech and ad-tech (Manchester) and e-commerce (Newcastle). Through Tech North’s Northern Stars we’re able to showcase and connect the North of England’s best digital tech startups, raising their profile on a national and international stage, with a range of companies from drone marketplaces to dating apps, including startups Formisimo and Peak.
- Boosting skills and diversity: the launch of Tech City UK’s Digital Business Academy
A key milestone for the organisation was the launch, 18 months ago, of the Digital Business Academy in partnership with Cambridge University, Judge Business School and University College London. With over 17,000 UK residents now in training on the Digital Business Academy, and over 60 business partners offering rewards such as internships and startup loans, we’re keen to continue expanding its reach and impact.
Yet as proud as we are of what’s happened over the last five years, we’re only too aware the UK’s digital transformation is still a work in progress. So here are some of the things which need to happen next.
- We need even more tech role models to inspire the next generation of entrepreneurs.
To build a sustainable ecosystem, we need more role models – people who have built successful businesses – to share some of their insights and firsthand experiences, with the next generation of entrepreneurs. That’s why we must double down on programmes like Upscale, Future Fifty, the LSE’s ELITE and Growth Builder to boost collaboration and engagement.
- The UK needs a global outlook to be at the forefront of the next revolutions in tech.
So far our mission at Tech City UK has been to create programmes to support entrepreneurs in a very structured and engaged way. We champion entrepreneurs as future employers, wealth creators and drivers of our economy – and try to remove any friction from their path. But five years on, we also need to make our case globally, so that people from Seoul to Bangalore, and from Tel Aviv to Shenzen look to the UK as at the forefront of change, whether that’s in robotics and automation, AI or Blockchain. Or whatever’s coming next.
- UK needs to increase productivity through adoption of technology by businesses.
UK businesses are behind some other G20 countries in adopting new technologies. We need to find fresh ways of supporting established businesses to adopt new technology and drive overall productivity for the economy.
- UK to be a leader in emerging technologies such as Artificial Intelligence, Machine Learning and Blockchain.
As data becomes the fuel for the digital economy, the UK should do all it can to foster the growth of more ‘deep technology’ companies, specialising in data science, artificial intelligence and machine learning. Companies such as UK-based Deep Mind and Improbable have pioneered our way here. Even this week’s Twitter acquisition of Magic Pony is a reminder of how far our AI has come in the UK.
- We must improve the way, and the frequency with which, big institutions and corporates engage with startups — and vice versa.
Tech isn’t a silo, a sector apart. Today it runs deeply in every sector, and is reshaping many aspects of our lives. That’s why big institutions and corporations need be right at the heart of future success for it to be meaningful and lasting. We need to help the tech and corporate cultures engage with and understand one another. At Tech City UK, we’re already doing that by hosting, among many other organisations, the Bank of England and members of the tech ecosystem for discussions on Blockchain. But we need to find far more ways to enable these worlds to collide more effectively to power innovation.
- We need to think big. The stakes are high.
The thought that runs through my mind every morning is ‘Are we thinking big enough?’. Lowering the barriers to entry into the digital economy is the right goal for us. But we must be prepared to lead the way intellectually too. I believe that a good indicator of a nation’s cultural and economic well-being lies in the institutions it creates. Whether that’s the RSA founded in 1754, or the Alan Turing Institute in 2014, set up by the Government to support the UK’s leadership in data science, such organisations create a space where new ideas can be debated and new initiatives kick-started.
We need a big collective mind, unafraid to imagine. Your ideas are always welcome. http://www.techcityuk.com/contact/
Thank you for reading,
Gerard & the Tech City UK team