Photo credit: David Guerra Terol
Silicon Roundabout or Tech City, the UK’s most famous tech hotspot, is at the heart of the start-up revolution. Widely touted as the UK’s answer to Silicon Valley, which gave birth to Google, Facebook and more, there’s been a lot of attention given to it recently. But is this happening at the expense of other start-up hotspots in the UK – and are we really going to replicate America’s success? We asked a few start-up heroes to tell us what they think!
Does Tech City get too much attention?
Mike Flynn, CEO of digital marketing specialist Fast Web Media, which has offices in both Manchester and London, thinks so. “Entrepreneurial spirit isn’t about where you’re based – it’s a state of mind. Sure, it can be useful being located close to other start-ups, but it doesn’t mean that you’re any more likely to succeed just because you’re based in a small area of London. Cities such as Manchester and Leeds have thriving communities of small businesses, especially in the digital and mobile sectors, and deserve the same level of attention as Silicon Roundabout.”
Where else in the UK are exciting things happening for tech companies?
Cally Russell, the founder of Mallzee, is based in Edinburgh and witnessing first-hand the innovation happening there. “The success of Tech City/Silicon Roundabout is clear and in some publications they receive a high level of coverage, but I think outside of them people can see the success of other hubs like Edinburgh and Cambridge,” he suggests. “In Edinburgh we’re seeing great strides being taken. Companies like SkyScanner, Fanduel and Freeagent and others are gaining more and more attention – not just in the UK, but internationally.’
Another entrepreneur from the north, Glyn Powditch – who has just finished his MBA at Manchester Business School – agrees. “The City of London is clearly a great source of capital and East London has had its fair share of the entrepreneurial spirit. However, in the North, we’ve had countless technology-based business successes like Late Rooms, Appliances Online and Money Supermarket – so if there has been too much focus on the South, it’s not been showing.”
John Newton of Alfresco, however, feels that other hubs don’t get the attention they deserve. “There are many other technology hubs around the UK; Reading, Cambridge, Manchester, Maidenhead and Newcastle all have strong tech communities focusing on specialist sectors but they don’t get even an ounce of the attention or recognition for their technological prowess,” he tells us.
Dangers of tech city
This concern – that attention is focussed on Tech City at the expense of other tech hubs in the UK – crops up again and again.
“We hope that London’s Tech City will have a success story to tell, but what effect would this have on other UK region’s economy?” muses Dr Malcolm Parry, director of the Surrey Research Park. “It’s possible that Tech City could take potential investment away from areas like the Thames Valley, and we might see a displacement of businesses and skilled people leaving the area to relocate to East London.”
Not the next Silicon Valley
William Webb believes that the start-up scene here is brilliant, but is very different to the US start-up scene.
“Many in the UK would like to emulate the success of big American companies – surely we should also be seeking to grow the next Google or Facebook? And yet while we have a vibrant start-up culture and generate many innovative ideas, almost all our successful companies go on to be acquired by the large US companies that we seek to emulate, making the US companies even stronger. But actually, it’s not all bad.
“While the perception is that innovation comes from large companies this is not the case. In the latest Wall Street Journal Innovation Awards something in the region of 85% of the winners were SMEs. It is almost always in the start-ups that the innovation occurs, the large companies are just the brand and the delivery vehicle for turning the ideas into products. And the large companies are not where all the jobs are. In the UK nearly 60% of all employment comes from SMEs.”
Benefits of Tech City
There’s no denying that a concentrated cluster of tech start-ups fosters entrepreneurial spirit, and an atmosphere where ideas can be swapped and developed.
“It is worth reminding ourselves of the objectives for promoting and investing in the cluster,” continues Webb. “Clusters like Tech City provide a vibrant home for start-up businesses where ideas could be exchanged, experts readily recruited and venture funding would be on hand.”
Larger companies coming to Tech City can also have a positive effect on start-ups, he believes. “The Government talks of innovation and of inward investment, and indeed the UKTI is tasked specifically with bringing foreign companies to Tech City. We’ve seen the results of this with Google, Cisco and others taking office space or otherwise investing in the cluster. Growing small companies that get acquired by large overseas players fits the bill perfectly. The UK gets the benefit of innovation and high-tech jobs and then the money and presence of the best businesses in the world.”
What needs to happen in the UK tech scenes?
So what needs to happen going forward to ensure that other tech hubs in the UK get a slice of the attention?
“While government investment in Tech City has been beneficial for driving forward the tech community, if we want the UK to remain a global leader in technology there needs to be more incentives and opportunities for technology businesses based outside of the capital,” John Newton believes. “Some of UK’s most valuable tech companies are based in regional hubs outside of London and we should be driving more investment into these to encourage growth. It’s this investment across the country as a whole, not in just one region, which is allowing us to creep slowly closer to our neighbours across the pond in Silicon Valley and promote the importance of UK tech companies in the wider business landscape.”
Mike Flynn also believes better infrastructure is the key to get other hubs up to speed – and also for helping Tech City itself compete with Silicon Valley. “Investment in infrastructure (like super-fast broadband) is always helpful, and we need this across the UK to break down business barriers. While we’ve benefited from the infrastructure enhancements in Manchester’s MediaCity, and from working with local partner organisations, our client base is truly international – which means it’s our service and approach that matters, not our actual location.”
Hungry for more about start-ups? Then why not check out our feature on what makes a tech start-up great?