How to turn start-ups into scale-ups
Russ Shaw, founder of Tech London Advocates, discusses the three biggest hurdles for tech businesses outlined in Sherry Coutu’s Scale-Up Report
2014 was a year that saw London arrive as the destination for tech start-ups worldwide. However, whilst we have shown London can generate innovative start-ups, the challenge for 2015 will be nurturing the growth of scale-ups into globally dominant tech companies.
A stronger than ever tech landscape
The tech landscape has never been stronger. According to figures published by London & Partners, London’s technology sector attracted over $1bn of foreign investment over the first nine months of 2014 – a record-breaking 30% increase from the previous year. And with 27% of new jobs in the capital last year being created as a result of the start-up boom, the ecosystem is teeming with ambitious entrepreneurs and hungry investors.
However, the Scale-Up Report, published yesterday by Sherry Coutu, details just a few of the potential hurdles which London’s nascent tech titans will need to address if they are to reach their full potential.
1. A talent shortage
After a strong debut, our young tech firms are now looking at producing their difficult second album. 45% of the members of Tech London Advocates have identified a shortage of talent as being a major impediment to the capital’s future growth as a tech hub. In order to continue the present upward trajectory, we need to address this skills gap as soon as possible, establishing a highly trained digital talent pool here in the UK, equipped to meet the demands of a rapidly changing technological landscape.
2. The gap between education and business
Coutu’s calls for increased public funding, and a structured collaboration between UK scale-ups and our schools, colleges and universities will certainly go some ways towards addressing this disparity if met. Britain is home to some of the world’s leading universities: I have spoken before of the need for us to start producing world-class graduates equipped to operate in the digital economy if we are not to fall behind our competitors in the race towards tech supremacy.
3. A lack of networking and collaboration
The most important recommendation in the Scale-Up report is to build a database of promising tech companies across the UK. When I was working at Skype, I learnt about the fast-growth potential of network effects – developing like-minded communities of brand ambassadors. This is what I am creating with Tech London Advocates and believe that collaboration, transparency and proximity will provide a platform for scale-ups to prosper. A network of support will facilitate introductions to the right investors, government figures and new recruits.
As Coutu claims, a 1% boost to our tech sector over the next three years will reap enormous results: generating an estimated £38bn and a potential 238,000 new jobs.
The rewards are there for the taking but our technology sector needs world beating scale-ups to work together to cement our position as a global tech hub.