London’s Tech City and “Silicon Roundabout” is inspiring economic growth in the sector around the whole of the UK. But how will that expansion of a new and emerging industry impact on London’s tech scene?
In 2014, if you wanted to get a taste of the explosion of tech companies around the UK, not just in London, you needed to look no further than the Tech Nation report. Compiled by Tech City, the report evaluated the key locations around the UK experiencing a similar rapid expansion in tech firms in key locations around the UK. From gaming in Liverpool to creative agencies in Manchester and biotech in Cambridge, the report highlighted hotspots. The fastest growing tech hubs in the UK are no longer in London; number 1 spot is in Bournemouth and No.2 is in Liverpool.
What does that mean for London? Tech City remains a hotspot for tech entrepreneurs but the real demand is for talent. To illustrate the demand for really great developers, Management Today reported the story of a software engineer who accidentally posted his CV online and was inundated from calls and offers from interested hirers. In 2008, the article says, a graduate software developer who’s able to use a language like Java or C++ could earn up to £28k basic salary. That’s now risen to £40k and even £50k. The contract market around IT workers has increased significantly because of demand for those with the skills it ride the wave of the sector’s success.
That demand is great for those who work in the tech industry. Higher wages and the prospect of working for a hot start-up or a vibrant young company is attractive. Higher wages also make it easier to live in the capital. For developers and coders it’s a dynamic industry to be part of, and one that looks great on the CV. Working on a fixed term contract in London for a period of the year (and then going back to a tech cluster elsewhere in the UK for example) can enable them to be part of London’s tech scene, but also connect it with the rest of the country, in a way that’s both flexible and scalable.
It’s also attractive to those wanting to relocate to London from further afield. Varun Shoor wrote about why he moved his start-up from India to London. Growing up in Punjab he was separated from the Indian high-growth companies in Bangalore. It made as much sense to move his start-up to London as it did the 2500km north to Bangalore to benefit from the cluster economy there. London’s attractiveness came from being a global hub, like San Francisco or Berlin in the tech world, making it the most attractive place for a new international desk. It allows his start-up to have a foothold in a vibrant tech scene.
The development of London’s Tech City has had a phenomenal effect, not just on the tech sector in the capital but also wider in the UK. It has given legitimacy and a rapid evolution to the UK’s tech scene with powerful clusters growing quickly outside of the UK. Yet London still remains the global hub and even if the industry doesn’t relocate wholesale to London it still wants to hold onto that foothold, that tie with the dominant London tech economy that is attractive to entrepreneurs and developers alike.