Tech City, three years on: What's really changed?

Summary:The UK government is keen to promote the success of its Tech City initiative but what's happening on the ground is more complicated than the official story.

Tech City is a blueprint for creating a tech powered economy, according to Prime Minister David Cameron, as a new report claims a rocketing number of tech companies are being formed in London.

According to the report between 2009 and 2012 the number of tech and digital companies in the capital increased from 49,969 to 88,215. The report said 27 percent of all job growth in London comes from the tech/digital sector, with approximately 582,000 people now employed by the sector in London.

Between 2009 and 2012, employment in the tech and digital sector in London grew by 16.6 percent – compared to 0.3 percent in the UK overall.

'Doing a startup is a very lonely thing': Google's Campus and what makes Tech City tick

'Doing a startup is a very lonely thing': Google's Campus and what makes Tech City tick

It was in November 2010 that Cameron put the marketing might of HM Government behind the nascent Silicon Roundabout tech enclave, based in east London, rebranding it Tech City.

"Today Tech City serves not only as an example of how a city can be transformed into an engine for growth and innovation, but it is also a blueprint for fostering growth that has been recognised globally," said Prime Minister David Cameron said today. "We are determined to build a rebalanced economy across the country and get behind the entrepreneurs imagining a new tomorrow in the dozens of technology clusters, accelerators and start-up incubators across Britain."

The government has taken the opportunity of the third anniversary of Tech City to unveil a set of initiatives aimed at encouraging more companies to make their homes in London (and maybe even IPO there). For example its 'Exceptional Talent' visa could help entrepreneurs and innovators to move to the UK more easily, and up to £12.5m in funding will be made available through the Technology Strategy Board for digital projects.

Tech City UK also named the second wave of companies to be added to its Future Fifty list of high growth companies, while Imperial College London said it is building a new data sciences lab to open in 2014. Startup accelerator MassChallenge said it will be launching in London next year, one of many of the accelerators opening for business in London.

This sounds great – but when calculating its numbers, the report throws the net pretty wide, adding up jobs in everything from newspaper publishing to advertising and design as well as more core jobs such as computer programming.

And because most of the numbers are London-wide it's actually very hard to calculate the impact of the real Tech City, a swathe of the north and east of London.

For example, Google's Campus office and meeting space , one of the key sites in Tech City, has 22,000 members in total while few of the tech companies in the areas have more than a few dozen staff, the largest a few hundred.

Indeed, some of the larger tech employers are based on the other side of London where many of the big enterprise tech companies have their UK and European headquarters.

While the government is keen to encourage further investment in the area by presenting a rosy picture, the reality is slightly more complicated. Tech City – Silicon Roundabout as was – is still very early in its life and success is not assured. For example, while it's a lot easier to start a company, finding the funding to take a small success and turn it into a giant is still very hard to find.

Alastair Mitchell, CEO of enterprise collaboration company Huddle, which has offices overlooking Silicon Roundabout warned: "The government and investors now need to provide more large scale funding  to help transform good medium-sized businesses into outstanding global leaders. Without this, all the good work done thus far will be for nothing and we won't see organisations blossom as they should."

Further reading on Tech City

 

Topics: Emerging Tech

About

Steve Ranger is the UK editor-in-chief of ZDNet and TechRepublic, and has been writing about technology, business and culture for more than a decade. Previously he was the editor of silicon.com.

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