Amidst doom and gloom predictions about Brexit, let’s try to focus on the positive side of things. Being an Alpha City, London can be considered the capital of the world for many reasons: for its diverse population, its world-class educated workers, and for its central role in business and finance. In fact, in recent years, London has acquired the title of the leading global financial capital of the world, a title that might be passed onto other cities (highly unlikely at the moment), as we still do not know the effects of Brexit on London’s financial services (read everything is going to be just fine).
Tech-City
If financial services are part of pre-Brexit London, post-Brexit London will be all about tech. East London Tech City, also known as the Silicon Roundabout (mimicking the famous Californian Valley), is an area located in the Islington and Hackney boroughs. It has gained prominence after the 2008 recession, due to many financial companies leaving the area, plummeting office rents, that ultimately attracted young technology start-ups. In the following years, both the government and the private sector, invested massively in the area, now packed with tech companies and university campuses.
From the Silicon Valley to the Silicon Roundabout
As if Covid-19 didn’t happen, London managed to attract almost £8 billion ($10.5 billion) in venture capital. Furthermore, the city has acquired more tech investment than other major EU capitals..combined. Almost half of the fundings came from non-Europeans investors, 36% of which were Northern Americans. Covid-19 apparently acted as an accelerator for this type of industry and more money is expected to flow to London. Tech workers are moving to the British capital by the thousands, as confirmed by a 10% increase in the number of tech employees looking for homes to rent in the capital between 2018-2019.
The new Silicon Valley?
The pandemic has speeded up the digital transformation of health and education sector so much, that the point of no return is long gone. London’s ever-growing tech sector can facilitate this process even more. Given that Silicon Valley is almost exclusively accessible to Big Tech names, London could become the new incubation centre for the tech giants of the future. The city has to attract fun and innovative and create the right infrastructure for them, however, competition from other cities is fierce.
Closing the gap
Whilst being too early to predict whether London will become the new Silicon Valley, it is certainly closing the gap with it. London has always been more conservative when it comes to entrepreneurship. However, to succeed in tech, companies have to be allowed to fail as many times as necessary before they win. After the financial crisis, Britain has rediscovered its entrepreneurial creativity, especially in terms of financial services. As mentioned above, Britain’s tech industry is undergoing a process of diversification, as more and more startups are operating in the food, healthcare, and education services.
UK Tech golden decade
IPO activity is set to bounce back this year. The UK currently has almost 140 potential unicorns and 80 unicorns, more than any other European country. Furthermore, the Treasury will release a review of listing rules to encourage UK tech companies to become public. Darktrace and Deliveroo are among those companies who are reportedly considering an IPO. This might be in fact the start of a golden UK Tech decade. With 47 universities, the advantages of doing business in English, and an unlimited pool of highly qualified workers, London is the place to be.
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