Technology November 2011

London’s Silicon Valley

Tech City talent drawing global firms, transforming once-grubby East End

Tech City is a cluster of technology, digital and creative firms that have congregated in the Shoreditch and Old Street districts of east London. They aim to attract more like-minded businesses—including Japanese firms that are looking to enter, or expand their presence in, the UK and Continental European markets.

The Tech City Investment Organisation (TCIO), which is part of UK Trade & Investment (UKTI), held a seminar at the British Embassy Tokyo in mid-October. Presenters included representatives of two British firms based in the region, as well as a Japanese outfit that is benefitting from having its headquarters in London.

Tony Hughes: significant growth in three years

Tech City is part of the UK’s Olympic legacy programme, to regenerate the district and gain lasting value from the heritage of the London 2012 Olympic Games and Paralympic Games.

“There has been significant growth in the number of companies operating in this district in the last three years, with 15 there in 2008 but more than 500 now”, said Tony Hughes, a digital content sector specialist with the TCIO.

“Other creative designers, from the worlds of fashion, music and art, are also clustering there. We have found that small companies that have set up in Tech City have grown quickly because they have access to so much talent”.

The area is a hotbed of inventiveness, where more traditional content and industries are being taken on-line, he said, and where “small, agile and cool companies” are able to rapidly commercialise and make money from a project. Added to which, Hughes said, there are many parallels between the Japanese and UK markets, making Tech City an ideal place for testing new products and services.

Tech giant Google has clearly identified the potential of east London, he pointed out, since it is building a seven-storey incubation facility in the area to tap into the local talent base.

“Lots of companies that are in Tech City want to work with you”, he told the representatives of around 80 Japanese firms who were present. “They are also thinking globally and, for them, partnerships with firms from here may also mean opportunities in Japan and the Asian market for them.

Jo Roach has worked with many firms in Tech City.

“Tech City has been compared to Silicon Valley, but I think it is quite different”, Hughes said. “Silicon Valley has high-tech companies, butTech City is not just about the technology; it’s also about music, film, advertising, publishing and fashion that are all there in London, making it easy to forge working partnerships and develop content across platforms”.

It helps that Britain is, arguably, the most advanced nation in Europe in terms of technology acceptance, with average broadband access speed at 6.8Mbit/s, some 53% of adults having a social network presence and 35% of the population regularly using mobile systems to access the Internet. In addition, more than 35mn people subscribe to mobile systems for everything from games to learning, buying products and services, banking, social networking, music and plain old e-mails.

The delegates also heard from Makielab founder Jo Roach, who has been based in Tech City for three years. She has worked with a host of firms, including Channel 4 on an interactive website aimed at making teenagers feel more comfortable and confident in their daily lives. In essence, she said, the Super Me site “gamifies mental health”, and the outcome has been thousands of UK teens choosing to interact with a site that teaches them about mental health.

Julian Ehrhardt, director of business development at Ustwo™, provided an overview of his firm, which develops multiplatform mobile applications and applies user-experienced design to create its products. Clients have included Sony, Turner, H&M, the BBC, Credit Suisse and The North Face®.

“Tech City is a great place for anyone who is looking for strategic partners because they are there, they are eager to work with you and it’s on the doorstep of Europe”, he said.