As companies start pitching for Tech City grants and the funding is doubled, I reflect on what’s needed to make it a real success. I started my IT career in Shoreditch around 1997, even at this time there was a lot of technology and media companies established in the area. We had a close network of contacts and there was quite a buzz at that time in the IT sector.
The Tech City initiative wraps together new and existing technology and media based companies in this area and provides it with a brand, furnishing the community with an identity and sense of ownership. In turn, this will enhance and strengthen collaboration, cooperation and facilitating doing business together, whilst driving competition and development.
The Tech City brand identity instils characteristics such as enthusiasm, motivation and a sense of accomplishment that combine to produce an attitude to business similar to that of the American’s ‘can do’ attitude, which plays its role in the success of Silicon Valley.
This initiative has an excellent opportunity to succeed because it’s building on the existing foundation of technology and media focused organisations in the area between Old Street and Stratford. Investment in this area not only means an initial injection of cash for those receiving a grant but acts as a catalyst for existing companies.
Some might criticise the government for using the Tech City initiative as a PR stunt, with companies applying for grants by video and applicants pitching in a ‘Dragon’s Den’ style to an audience of Venture Capitalists. But I believe this initiative has longevity, as it’s building on the legacy of companies who have been successful in both geography and sector for 15 to 20 years, who with this investment will only continue to do so.
Having said that, I do worry that this is not a significant enough level of funding, despite the investment amount increasing from £1m to £2m. This will be ideal for small grants awarded to start-ups. However, it’s woefully short of the investment needed for Tech City to compete with Silicon Valley.
IT is a big industry in the UK, at present London accounts for up to 33 per cent of all IT jobs in the UK; with this initiative it will continue to be one of the major industries in the UK with some reports suggesting an 18% year on year increase in IT jobs.
However, to make the most of this opportunity, and to drive technology R&D in the UK, the private sector needs to get behind the initiative and invest at levels on par with, if not exceeding, that of the public sector to increasing funding to the level of £10m then £100m and beyond. There needs to be significant amount of interest and investment from wealthy, tech savvy, philanthropists, Venture Capitalists and Private Equity companies; this is the most realistic way that London and the UK can compete with the Silicon Valley.
The government backed Tech City initiative is undoubtedly great news for the IT sector, London and the UK economy. Even through the turbulent UK financial economy, technology stocks have remained resilient. This is a strong indicator that the UK’s IT industry is robust and the initiative will further boost the IT sector and the economy as a whole.