Has London’s technology sector finally come of age?
Tech London Advocates founder Russ Shaw looks back on the first six months of 2014, talking acquisitions, major investments and ambitious targets
The first six months of 2014 has seen the capital’s technology businesses capture the interest of global investors, dominate headlines and pioneer genuine innovation.
Not only has this resulted in major investments, but the sector’s new found confidence has fuelled Europe’s largest digital showcase, London Technology Week. After three years of rapid growth, the city’s burgeoning tech sector seems to be coming of age.
Tech City as a financially viable hub
In one week this January, Google acquired DeepMind and Zynga acquired NaturalMotion. These two transactions saw more than one billion dollars invested in London’s tech sector and sent a strong message to the global investment community. After years of hype, the digital sector in the UK’s capital was suddenly a financially viable technology hub.
Since then, further investment activity has consolidated this status. Circassia, a bio tech startup, floated in London for more than £500m, making it the largest valuation of a British life sciences company in history. This was followed by Just-Eat and Zoopla raising more than £2bn in the process. Not only were London tech companies proving they could engage with a global customer base, they were demonstrating the business acumen to translate that into financial success.
Why it’s all about growth
Ever since the launch of the Tech City project in 2010, I have been saying that London’s tech sector will be defined not by the number of small start-ups, but the number of growing businesses, or scale-ups, executing successful exits. 2014 has been the year when that has become a reality.
However, there are still obstacles to overcome. Fortunately, the year has also been defined by a renewed appetite within the technology community to recognise, and tackle, these roadblocks.
Immigration, the number of women in technology and infrastructure have all been recognised as serious problems but the most urgent of these issues is a shortage of talent. Nearly half of the Tech London Advocates group identified this as the single biggest obstacle facing the capital earlier in the year and a string of commentators and experts has since entered the debate. Kit Malthouse, deputy Mayor of London for business and enterprise has called for more apprentices in the technology sector and entrepreneurs such as Ed Bussey, founder of Quill, have spoken about the struggle to find talent in the UK.
Organisations such as Makers Academy and Decoded are providing courses for digital skills which is a step in the right direction but more needs to be done. The government needs to make technology an integral part of the curriculum. The recent report from the UK Digital Skills Taskforce outlines the necessary requirements to tackle this skills shortage in our education system and it is clear that this September’s introduction of coding into the national curriculum should be seen as a starting point, and not the solution.
As the number of events and entrepreneurs involved with London Technology Week demonstrated, we now have an engaged community of experts in the capital keen to celebrate success and fight for change. This mobilisation of the workforce is precisely the foundation on which a globally competitive tech hub can be built and is testament to the growing maturity of London.
Setting targets for the next six months
Over the next six months, there are some clear goals which London’s technology sector has to achieve to continue this momentum. Having spoken to local government, think tanks, startups and technology experts the consensus is clear:
- More than 20 tech IPOs in 2014
- Government commitment to invest in digital skills in 2015
- Reforms to immigration legislation for tech professionals
The good news is that if the next six months are as successful as the last, I see no reason why these can’t be reached.
The capital’s technology sector really does seem to be growing up into a globally hub of innovation and financial strength.
Russ Shaw is the founder of Tech London Advocates.