London has always been a world leader in innovation. From the invention of the first mobile phone, to the creation of a ‘metro’ system that’s now used worldwide, London has continually risen as an international tech hub.
But just how did London become one of the fastest growing technology hubs on Earth?
In London, over 50% of all technology companies are smaller than five years of age. In the world, that figure is 9%. London is not just a hub for software engineers (though it has more than twice as many as any other country), but also accounting firms, marketing agencies, and other businesses. The city’s population of computer programmers grew by 31% between 2012 and 2013 alone. This statistic seems hard to believe: that’s an increase in population of 20 times the size of Austin, Texas! But what accounts for this growth?
One oft-cited factor is the diversity in London’s economy; there are more small startups and tech companies here than in San Francisco or New York. The city’s technology scene is not limited to the “usual suspects” such as advertising, gaming, or social media (though those are present). It also extends to logistics, finance, legal services, and healthcare. London is also home to many prestigious universities such as Oxford and Cambridge. These institutions pump out thousands of engineering graduates every year. A large number of London’s residents are foreigners who come here for school or work. The city’s convenient location in Europe has helped it become a magnet for tech workers from other countries.
The result is that you have a very diverse workforce in London with people from all over the world speaking multiple languages and bringing multiple points of view to their work. Many find this diversity exciting, and interesting. This diversity is one of the primary reasons why the city has become a magnet for tech entrepreneurs from all over the world.
London’s abundance of tech talent helps feed a vibrant entrepreneurial ecosystem. In London, more than half of all businesses are launched by recent graduates or immigrants. The city has many programs to help this entrepreneurial ecosystem flourish. One example is TechStars London. This program gives entrepreneurs access to mentors and workspaces, and eventually links them up with investors who might back their business ideas with money or advice and experience.
The city also offers mentorship not only from private companies such as TechStars, but also from public policy institutions such as the UK’s Department for Business, Innovation & Skills (BIS). This department was created by the government to foster innovation and entrepreneurship in Britain. The BIS provides funding and advice for entrepreneurs and encourages them to tap into government resources. One example is a Startupbootcamp scheme that enables small businesses to access the resources of a set of dedicated mentors who can help them develop their ideas into startups with a realistic chance of growth.
Why do these programs exist? At the most basic level, tech entrepreneurs need access to funding, and that comes from investors. Many of them are located in London’s financial district. The city is an ideal place for finance because it’s a gateway to the rest of Europe and has (relatively speaking) a cost of living lower than New York City or Silicon Valley. Many of London’s investors have offices in the East End, near startups and small tech companies in Shoreditch.
London’s large population facilitates innovation – it helps to make new ideas become feasible. For example, there are millions of people within a commutable distance from one another who might not otherwise meet. They are in close proximity to one another, and they have to deal with the same things (traffic, cost of living, etc). They can do so by thinking about how to solve those problems together.
Over the past several years, London has also become home to a large number of accelerators and incubators that help startups grow. Examples include Wayra UK (Telefonica), Startupbootcamp (technology focused on mobile/web services), Seedcamp (Early-stage European tech startups), and Entrepreneur First (Assists startup founders in London by providing them with the necessary tools and champions for their ideas). The aforementioned TechStars program must also be noted for its role in helping build London’s ecosystem.
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