London has always been well-known internationally for its historical and cultural importance. In recent years the city has also developed into a significant force in the technological sector. Innovative businesses were completely absent from London’s economy back in the year 2000, but the roughly 100 new high-tech businesses in east London have received international attention for their significant contributions to global business. While far from reaching the level of California’s Silicon Valley, the so-called “Silicon Roundabout” is joining cities such as Boston and Tel Aviv in the second-tier of global innovative centers.
The inexpensive housing options and unique social lifestyle available in east London is attracting talented young businesspeople to the area, while the English language and abundant wealth of the city also bring in a skilled international workforce. If the best and brightest young minds are mildly interested in migrating to London then exciting start-ups such as SocialGo, a company helping customers to build online communities, will help them to justify the career move.
Instead of sitting back and reaping economic benefits, David Cameron and his government are taking a proactive approach to supporting new entrepreneurs. “Entrepreneur visas” will help businesspeople to avoid stringent immigration restrictions and large global technology companies are being encouraged to invest more heavily in the region. By the time the 2012 Olympics are held in the city, Cameron hopes that the technology industry will have spread beyond where it is today.
The major threat to a sustainable technology industry in London could come from a lack of investment. While venture-capitalists in the United States are likely to put significant financial backing behind mildly successful technology start-ups, it will probably take some huge success stories (similar to Apple or Facebook) before British investors will be convinced that technology is worth their time and money. If technological giants from the United States are encouraged to assist British businesses, they may buy out all of the best startups before they have a chance to thrive.
Will technology take off in London as it has in the United States? While it will take time to develop, there is a very high ceiling if the right steps are taken by government and business leaders. Silicon Valley must be used as a model for success, but relying on the financial support of American businesses could be a self-destructive strategy. The growth of Silicon Roundabout should be seen as a bright light, but it is far from a stable guarantee.