Why London remains Europe's top tech hub
Last year the UK capital attracted more investment than any other European city as tech firms of all shapes and sizes create cutting-edge clusters.
As record levels of investment flow in, London is keeping its crown as the leading tech city in Europe. Last year the UK capital attracted more investment than any other European city as tech firms of all shapes and sizes create cutting-edge clusters.
“London is seen as a major driving force for talent in Europe,” says Michael Davis, Head of London Unlimited, JLL. “It’s home to a rich community of digital arts, media and creative businesses, and the largest concentration of financial services companies.”
A flourishing part of the UK economy
Across the UK, the digital sector is creating jobs twice as fast as any other industry, impacting the way other companies work and influencing the bricks-and-mortar makeup of its cities.
“If not for the growth of the tech sector, the Shoreditch real estate market may not have blossomed,” Davis says. Prime city centre locations are feeling the impact of the booming digital sector too, as tech firms take up office buildings once occupied by other industries, pioneering a growing demand for flexible office space that can accommodate the collaboration and communal energy that are the hallmarks of the tech sector.
“The tech market in London has matured dramatically in the last few years,” Davis says. “Historically, local start-ups would try to get their company to a certain size, hope for a buy-out, or move to the States in order to get the next level of funding.” Now, as London emerges as a global tech powerhouse, its Silicon Roundabout the UK’s answer to Silicon Valley, homegrown tech companies have the opportunity to achieve those next levels right where they started.
Investors take note
In the year or so since the vote to leave the European Union, London tech firms have attracted over £1 billion of funding.
Venture capitalists continue to find the capital’s financial tech firms highly attractive, with the fintech sector receiving more investment than any other sector over the last five years.
Newer tech industries are also emerging as prime propositions for investment. Artificial intelligence and machine learning firms received £85 million investment in 2016 – 20 times more than in 2011 while the robotics and drone tech sectors saw over £14 million of investment last year, compared to tens of thousands of pounds in the previous two years.
Yet Brexit is casting a shadow over the sector with concerns over the regulatory impact of a European exit. For now, the figures suggest that investors are betting on the UK tech sector – but that’s not to say London has no competition for the title of Europe’s most tech-savvy city.
Stockholm is home to the several billion-dollar start-ups, including Skype, Spotify, and Candy Crush developer King; for young companies, Berlin offers the energy of London coupled with lower living and operational costs; while Dublin, home to an up-and-coming start-up scene, will be the only English-speaking country in the Eurozone, a potential litmus test for tech companies contemplating a post-Brexit relocation.
Yet, as Davis notes, “No other city holds the same cumulative balance London holds.” Since 2012, a new tech and media company has launched in London every hour. In its top tier tech hubs, rising property prices have proven an obstacle for some start-ups, but more are moving in for its skilled talent pool and the diverse tech disciplines.
“London embraces new ideas and new forms of tech, and it has remained resilient,” Davis concludes. “If it can continue to evolve, it will absolutely continue to be Europe’s leading tech hub. Key areas will be AI, VR and Cyber Security – all a strong focus for the UK government right now.”