Gerard Grech, CEO of Tech City UK and a man right at the heart of the UK’s start-up scene, recently sat down with us to discuss how London became Europe’s tech capital. As well as his biggest tech trends for the next five years and how best to address the UK’s looming digital skills gap…
What is it that makes London such a great place to start a tech business and what advantages do you think London can offer over other cities supportive of tech such as San Francisco?
London is Europe’s tech capital. A record-breaking £1.4bn was invested in 2014 – twice the amount in 2013 and 20 times the rate of investment from five years ago. With the capital’s strong heritage in creative industries and professional services and some of the world’s leading universities, London technology businesses can also benefit from access to a skilled tech talent pool. Heavy hitters like TransferWise, Busuu, World Remit and our co-working friends Grabble are demonstrative of the revolution, disrupting traditional industries and growing rapidly.
London’s central location means it is an ideal place to do business across continents, making it an attractive destination for digital businesses with global ambitions. With 36 tech accelerators and over 70 co-working spaces, London based tech businesses can also take advantage of collaborative networks and support organisations.
While much of London’s early tech growth was centred on the East London area, we are now seeing the rise of other tech hubs across the city including FinTech in Canary Wharf, the Knowledge Quarter in Kings Cross, White City, Olympic Park and Tech City Croydon. London is rapidly emerging as the epicentre of global innovation in digital.
What are some of the challenges London is facing to further establish its stature as a global leader for supporting tech founders and what needs to be done to overcome them?
London’s tech sector has grown at an unprecedented rate. In fact, the recent findings of our Tech Nation report found that the Inner London cluster (covering 12 boroughs) has seen a 92 per cent increase in the number of new digital companies formed between 2010 and 2013. This has brought about a number of infrastructure challenges such as access to high-speed broadband and affordable property. At Tech City UK we are working closely with entrepreneurs and the London business community to ensure that their evolving needs are met.
For example, as the demand for high speed broadband increases, we are working closely with broadband service providers and policy makers to ensure that London’s businesses have greater access to fast connection speeds – the lifeblood of their growth potential. Just recently, we have seen positive progress with the recent news that Virgin Media and BT are making significant investments in London’s broadband infrastructure. The government’s Connection Vouchers scheme is another welcome initiative for digital businesses in London and across the UK
Access to talent was highlighted as a key issue for digital companies and so we worked closely with the Home Office to introduce the Tier 1 Exceptional Tech Talent Visa. This visa route allows individuals from outside the EU come and work at UK companies. We can endorse up to 200 applications.
What is your vision for Tech City UK?
Tech City UK has made great progress in helping to accelerate the growth of the UK’s digital businesses. We’ve seen exponential growth in from 200 to 3,000 businesses over a five-year period. Following the expansion of our organisation’s remit in 2014, we have delivered a number of nationwide programmes to support the growth of digital businesses at all stages of their development, in London and in cities across the UK.
The recent findings of our Tech Nation study revealed that tech clusters are thriving in cities across the UK with a staggering 74 per cent of digital businesses formed outside of London. While it is important that we continue to celebrate the strengths of our individual clusters, we can achieve more through encouraging greater collaboration and the sharing of best practices amongst regions.
Whilst we can see the geographical spread of innovation at the heart of the UK digital economy, London is the epicentre. It is the heart of the wider tech ecosystem, both a source of support and inspiration but crucially, also, a convenor of global expertise. I want to work with my team to continue to support this growth and to respond to the needs of the digital business community across the UK.
How best should the UK address the looming digital skills shortage of the future?
The rapid growth of the UK’s digital economy is creating an increasing need for digital workers. A recent study from Nesta found that Britain will need 745,000 additional workers with digital skills to continue growing the economy over the next four years.
In order to meet the large scale of this demand, it is important that we democratise access to digital skills. This is why at Tech City UK we launched the Digital Business Academy in November 2014 in partnership with UCL, Cambridge Judge Business School and Founders Centric, plus fast growth players like Unruly, Seedcamp and Twitter. Created with the help of some of the best minds in education, our online academy offers digital business skills to anyone – for free. But Digital Business Academy is more than a just free online learning platform, it’s an opportunities pipeline, linking participants to free co-working space, startup loan support and job placements through more than forty partners. With hundreds signing up weekly, we are currently seeking submissions for content partners for five new courses.
What do you think are some of the biggest tech trends that will shape the next 5-10 years? Can you please give some examples and briefly describe why you think they will be important?
1. Data analytics to make artificial intelligence a reality
Over the past few years we have seen the rapid development of digital technologies across big data. As machine-learning solutions become more advanced, 2015 has the potential to be a breakthrough year for predicative analytics and big data. We’re seeing global leadership in the UK in cities like Edinburgh, Bristol, Leeds and Cambridge.
By combining cognitive skills with analytical tools, we can now analyse large amounts of data in context and in real-time. From social data from the likes of DataSift to predictable keyboard functionalities from the likes of Future Fifty company SwiftKey, there are fundamental changes afoot in the way businesses are making strategic decisions and individuals are making consumer choices. With a strong expertise in big data and artificial intelligence, and the recent announcement of the establishment of the Alan Turing Institute, the UK has the potential to lead the way in this exciting field.
2. Rise of the Sharing Economy
The sharing economy is one of the most exciting markets to have emerged from the growth of Britain’s digital economy. From travel to pet ownership — it is reaching into many aspects of our lives. PwC has calculated that on a global basis, the sharing economy is set to rise to £230bn by 2025, from £9bn today.
In the sharing economy, networks become more dynamic than centralised systems. And reputation becomes a powerful new asset. But this doesn’t just have potential value in social currency; the sharing economy should also be seen as a huge opportunity for the UK economy. Companies like Airbnb and Liftshare are breaking the mould and I’m very excited to see what’s next.
Tech City UK and Virgin are passionate about supporting UK SMEs. Recently Richard Branson announced the launch of Pitch to Rich 2015, a competition giving away £1 million to three founders at the live final. If you are a British entrepreneur, don’t miss out on this chance to take your business to the next level.