London’s technology sector has grown significantly over the past three years, according to a report released today by the government-backed organisation tasked with supporting tech start-ups, Tech City UK.
The Tech City Annual Report – based on data provided by CareerBuilder and Economic Modeling Specialists Intl. (EMSI) – suggests that the tech sector is playing a key role in spearheading London and the UK’s economic recovery.
The report, which goes out on Tech City's third birthday, states that the number of tech companies in London grew 76 percent from 49,969 in 2009 to 88,215 in 2012, helping the overall tech sector in London to grow by 16.6 percent over the same time period.
It also found that 27 percent of all job growth in London can be attributed to the tech sector, with approximately 582,000 people now employed by the tech sector in London.
In the three years since Tech City UK was established, a large number of big players in the tech space have opened up offices in London.
In recent weeks US firm Box and social game developer Rekoo have located in London, joining the raft of leading tech companies – among them Facebook, Google, Twitter, Amazon, Cisco, Intel, Microsoft, FourSquare and Pinterest – already based in the capital.
In the last three years, new government policies and programmes have included the Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS), R&D Tax Credits, Patent Box, Entrepreneur Visa, Opening Government Procurement, the Future Fifty, changes to IPO regulations and the creation of the High Growth Segment on the London Stock Exchange.
The government claims that these have all acted to catalyse higher rates of start-ups, as well as creating a landscape favourable to digitally enabled firms to scale and grow rapidly.
Meanwhile, these changes to the business and policy landscape have caused Tech City to expand from its initial hub in Shoreditch to other clusters around London, including Imperial West, Level39, Croydon Tech City, King’s Cross, Royal Albert Docks, Soho, Silvertown Quays, iCITY and the Olympic Park.
Joanna Shields, Tech City CEO and Ambassador for Digital Industries, said: “In 2010, the government recognised the growth potential of the tech sector and three years on, the results are significant. The economic impact generated by creative and innovative digital businesses is not only supporting our recovery, but as today’s new data shows it has ensured our lead as one of the world’s leading digital economies.
“Our challenge now is to build on these firm foundations to drive higher rates of start-ups and create a landscape favourable to digitally enabled firms to thrive and contribute long term to growth and jobs.”
Prime Minister David Cameron added: “But this is not just about London. We are determined to build a rebalanced economy across the country and get behind the entrepreneurs imagining a new tomorrow in the dozens of technology clusters, accelerators and start-up incubators across Britain.”
Tech City UK, initially the Tech City Investment Organisation (TCIO), was set up in 2009 to support the existing tech cluster in London by helping the businesses based there to scale and grow, bringing international companies and investors to Tech City and helping companies based in London to expand overseas.