Will London Be Overtaken as Europe’s Tech Startup Hub?

ba-blog-3

According to a recent CBRE report, London is the number one place to start your own tech business in 2017 due to its diversity and ability to attract new talent. The diversity of the city encourages innovation, which cultivates the startups that London has become famous for.

In another more recent global survey however, London comes much lower down the list at number 16. In this particular survey, additional measures were looked at, including:

  • Monthly outgoings
  • Happiness
  • Annual leave
  • Pay
  • Disposable income

Shockingly, Silicon Valley’s overall ranking was way down at number 15.  One of the reasons for this result is the need for work/life balance. ‘Happiness’ was one of the factors that was looked at during the study, alongside what kind of lifestyle workers can expect in the area in which they choose to live and work.

It costs a considerable £2,528 per month on average for food and rent in San Francisco and £1,758 in London. This is tough for those eager and enthusiastic graduates coming to share their new ideas as starting on a low salary will not cover their rent and living expenses. In contrast, in Berlin it costs an average of just £786.50 for food and rent, resulting in the city ranking higher than both London and San Francisco.

Why is London still booming for startups?

  1. Diversity in business and culture

It’s not just the tech scene which has been booming in London, which has long been established as a global leader in finance. Canary Wharf is home to the world’s leading banks and the city competes with New York City for the status of the world's major financial centre.

A study by Early Metrics - a global rating agency for startups and SMEs - found that London is still ‘Europe’s fintech hub’, despite the implications of Brexit. According to the study, the financial technology sector will continue to thrive in London, even as uncertainty coupled with Brexit continues to weigh on the economy. The British capital still outranked that of its European peers.

Added to this, English trust laws and strong libel laws appeal to foreign business. The city also enjoys a strong advantage thanks to a well-entrenched commercial culture. SMEs may leverage the city's strong networking base.

The arts scene in London is also exciting to be part of and London has long been a player in the fashion world. You will find the latest fashion designers in and around East London and innovative pop up businesses are encouraged and celebrated.

Almost 40 per cent of the city’s residents were born outside the UK; contributing a diverse range of influences, cultures and global communication and connection. There is no typical Londoner these days. People who live in the capital speak over 300 languages and over 14 different faiths are practised here. This demonstrates the diverse makeup of this city. Today's London is as international as it is British.

Simultaneously, London has retained the classic traditionally British elements that set it apart from every other city in the world. From Big Ben to the Houses of Parliament, the Tower of London and the newer icons such as The Shard and The London Eye, it is no wonder that London offers startups an enthusiastic welcome and an optimistic future.

  1. Access to the best graduates

London is a continually refreshing and reinventing itself with a progressive and forward-thinking population. With finding talent a number one priority for SMEs,  London’s 43 universities display the highest concentration of higher education in Europe, offering a host of students for a small business start-up to employ and a large number of young people spotting niches in the market to start their own business venture.

  1. Investment

One of the key reasons that London is the best place for a startup is that that is a huge variety of opportunities for getting investment. This has bred an environment where startups can get up and running much quicker. Overall, some 7.2 billion pounds was invested in high-growth UK startups in 2016.

London also has a huge variety of flexible workspaces that are designed specifically for startups and there is a significant amount of supplementary  support for startups in the UK. The government sees SMEs as key to unlocking higher productivity so new businesses across the UK are receiving great support at the moment as yet more money is to be invested to support these enterprises.

Can London keep on attracting new business talent?

It is clear that although London is still coming top of some startup rankings, others fear that it will lose its top position in the next 5 years. Some are saying that Paris is set to overtake London as the tech startup capital of Europe after Brexit.

There is no doubt that when other work /life balance and happiness factors are taken into account, London loses that top spot. We can conclude from numerous statistics that the culture within your business and living environment has a definite impact on employee performance.

Startups have often have limited marketing budgets, but need to account for internal branding as well as external. It is vital for startups to improve employee engagement, as staff who are happier are often more dedicated. Another benefit is lower employee turnover, which will save you time and money.

While we can see the number of students in London as an attractive workforce for startups and as potential business entrepreneurs in their own right, students need to be able to afford to stay in the capital. The high cost of renting in London is a big challenge and solutions need to be found.

If this is not considered, new talent will look elsewhere to create their startup businesses and other cities across the globe will be consistently overtaking London in offering more realistic opportunities as future startup hubs.

Related Posts

 

Comments

No comments made yet. Be the first to submit a comment
Already Registered? Login Here
Guest
Thursday, 15 November 2018
If you'd like to register, please fill in the username, password and name fields.

Member Login

Business Insights & Tips

Leaderboard

1
Michael Lane
785 Points
2
Jill Holtz
780 Points
3
Ron Immink
732 Points
4
Fionan Murray
689 Points
5
ContentLive
270 Points
View Leaderboard