London: the new Silicon Valley?
New York’s Mayor sees the capital as the biggest threat to his city as a global technology hub, thanks to its huge talent pool. But some are warning the UK to beware the strength of competition, says Gideon Spanier
Saturday 19 October 2013
New York Mayor Michael Bloomberg delighted the UK’s creative industries this week when he let slip he sees London, not Silicon Valley in California, as the biggest threat to his city as a global technology hub. “He’s recognising what’s been happening here for some time,” says Joanna Shields, the chief executive of Tech City, the UK government agency set up in 2010 to promote London as a tech hub.
A rich cultural heritage and a strong talent pool have always made the UK a fertile place to build a creative business. Now high levels of broadband and smartphone penetration, plus an afterglow from the 2012 Olympics, are accelerating Britain’s advantage, at least compared with the rest of Europe.
It is understood Mr Bloomberg’s favourable comments about London have been noted by David Cameron, who has promoted the creative and tech sectors as an engine of economic growth, with initiatives like tax breaks for high-end TV drama and animation and the launch of Tech City. Creative industries are already growing at twice the rate of the UK economy.
“One of the strengths of the British economy is our creative industries but also our sense of innovation,” Mr Cameron told a roomful of creative bosses, entrepreneurs and investors at London’s National Portrait Gallery as part of this week’s Technology Innovators’ Forum (Tif-in).
“The creative industries are already 6 per cent of the economy. I think we can go further and faster,” added Mr Cameron, who reeled off “five fantastic facts” about UK creative industries such as the fact Harry Potter has been translated into 72 languages. Tif-in, which was organised by the Government’s UK Trade & Investment and Founders’ Forum, a group of entrepreneurs led by Lastminute.com founder Brent Hoberman and Lepe Partners banker Johnnie Goodwin, is a recognition that the future of Britain’s creative industries lies in digital.
As Lucian Grainge, the British boss of the world’s biggest music company Universal Music and a key backer of Tif-in, told the business leaders: “Digital development is absolutely fundamental and key to all of our futures.”
An earlier UKTI-Founders’ Forum event in February in Los Angeles resulted in £60m of deals between UK start-ups and investors and Mr Grainge, who is based in LA, is optimistic: “From my vantage point in California, the power of British content has a completely disproportionate effect on the digital economy and therefore the entire global content economy.” But he also injected a sense of urgency, noting digital meant huge disruption as well as opportunity.
Tim Davie, the chief executive of BBC Worldwide, the corporation’s £1bn-a-year commercial arm, sounded a similar, sober note at Tif-in. While championing the Beeb as a global brand, Mr Davie urged UK creative businesses to be “healthily, obsessively paranoid about the dangers of falling behind” and pointed out: “If you look at the top content websites around the world, you see the huge dominance of US and Asian sites and very few UK and European brands.” He went on: “We’re light. We should be worried. We’re too defined by history.”
He is right there are few global British tech companies to compare with, say, Google and China’s Baidu or TV networks to rival Disney or Discovery. What’s more, the fast-growing Latin American economies will soon offer new competition.
Some critics in the City have also complained London is a bad place to float a tech company compared with New York, with London mobile games company King.com, the maker of Candy Crush Saga, among those eyeing a US float. But opinions are shifting as Mr Bloomberg’s comments show. The London Stock Exchange has relaxed listing rules for “high-growth” companies and, in a symbolic step, Tech City’s Ms Shields this week announced the Future Fifty, a hot list of tech firms that could soon be floated.
Property website Zoopla, taxi-booking app Hailo and Moshi Monsters creator Mind Candy were among the first 25 companies named in the Future Fifty. Tech City and the LSE will provide a “concierge service” for the companies to consider their options. It was “borne out of a recognition we’ve got to do more to nurture this special class of high-growth companies”, says ex-Facebook executive Ms Shields.
So, despite the caveats, there was optimism at Tif-in about London and the UK. “The talent pool is greater than any other city I’ve come across,” declared South African-born Anthony Rose, the co-founder of London social-media TV app Zeebox, while Sir Howard Stringer, the former boss of Japan’s Sony, said there is “a sense of resurgence” in London.
Mr Goodwin of Founders’ Forum did not believe London has to succeed at New York’s expense as both cities are financial and media capitals which can serve as a “gateway to Silicon Valley”.
It says a lot that when Mr Bloomberg retires as Mayor in January, he is said to want to spend a lot of his time in London.
David Cameron’s ‘five fabulous facts’ on UK creative industries’ global reach:
* The Happy Potter books have been translated into 72 languages
* ‘Phanton of the Opera’ has been produced in 151 cities and 30 countries
* The world’s top-selling album has been by a British artist in five of the last six years
* Three out of the world’s five most visited art museums are in London
* The last Oscar won by a Briton was by a Brit playing a US President
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