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.
Want to attend one of our exclusive Scaleups Sessions on Tuesday 16 June to hear from MADE.com, YPlan, Sir Ronald Cohen and many more?
Register your details below for more information.