London’s Tech City

UK entrepreneurs also have other options for launching and growing their emerging companies including the much publicized Tech City in London, which has been recognized and heavily supported by the UK government and has become home to hundreds of startups as well as offices of large technology multinationals such as Cisco and Google.  Tech City initiative has been pitched as providing entrepreneurs and investors with a unique mix of urban diversity; concentration of of media, film, TV and creative industries; and proximity of government, and the initiative has been supported by the availability of tax benefits, liberalized immigration for entrepreneurs and the creation of a new High Growth Segment on the London Stock Exchange to enhance liquidity for UK-based emerging companies.  One major challenge, however, has been a so-called “digital skills gap” due to the large unmet need of firms in the UK digital sector for people educated at the graduate level or above: applications for IT-related degree programs have dropped dramatically at the same time that a large percentage of UK digital employers are complaining about their inability to recruit team members with the right technical and practical skills.  In addition, companies that have set up in Tech City have complained about high rents, difficulties in finding skilled workers in the immediate area and a lack of access to capital.  Nonetheless, the Greater London area remains extremely attractive because it has the highest proportion of skilled workers in the UK and the strongest local economy in the country and there have been calls for technology companies to look elsewhere in London, such as the Mayfair District, to set up their operations.  To learn more, see O. Solon, Europe’s Hottest Startup Capitals: London, WIRED (October 1, 2013) and C. Rhodes, Forget Tech City!: Mayfair is Where Tech Start-ups Should Be, London Loves Business (June 24, 2013).

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