In 2010, London Mayor Boris Johnson and Prime Minister David Cameron launched an initiative called Tech City. The programme was introduced to support the East London tech cluster, known as Silicon Roundabout, with the hope that it would one day rival Silicon Valley.
Five years later and technology companies are no longer confined to East London, the capital is full of them. London has officially become the technology capital of Europe.
It’s a bold statement but there’s evidence to substantiate the claim.
According to research published by Deloitte in 2014, London hosts 40% of the European headquarters of the world's top companies. In fact, 60% of top non-European companies with a headquarters in Europe have chosen London as their base.
Looking at technology specifically, London has an estimated 40,000 UK digital technology businesses with figures putting this at 50,000+ by 2025. And, according to Ernst and Young research released in June this year, London is also the most attractive place in Europe for international tech companies to establish a presence, drawing more than 1,000 projects between 2005-14 and beating the likes of Paris (381), Dublin (162) and Madrid (139).
The final element is the massive size of the market in such a small area. The London ICT market is thought to be worth $27 billion, and growing by more than six percent per year, making it the largest ICT city economy in Europe.
So is it just the size?
Gateway to Europe
The big North American economy has always preferred London as a gateway to the European economy.
As long as the weather is not too cold or too hot, the human transport and also data transport connections are excellent.
As long as the accent is not too posh or too slang, English is considered the best business language and most reasonable to follow when reading any technical manual.
Full of startup hipsters
Given the struggling economic environment across many parts of Europe, Europeans are more and more seeing London as the place to be.
For European University graduates, hipsters and fashionistas, aka startup employees, London is where we can find employers hungry to hire educated, multilingual talent that understand the latest trendy apps and social media sites.
London is not only a hotbed for the younger generations looking to make money. It is also for the middle aged that are looking to make more money.
Freedom of movement and the Non Dom status does not only make London interesting for the low skilled EU workers. More middle class engineers, analysts, researchers, marketers and managers also want London for the same reasons. There is a European brain drain that is in many cases leading to London.
According to the Office of National Statistics (ONS), 268,000 EU citizens, and 290,000 non-EU citizens immigrated to the UK in 2014. Opportunities are there for this migrant workforce. The fact that employment of EU nationals living in the UK was 283,000 higher in January to March 2015 demonstrates this.
Fly to the Moon
Someone once said 'Shoot for the Moon. Even if you miss, you'll land among the stars.' In the UK, that optimism is actively encouraged, with entrepreneurial spirit not just alive in London, but flourishing. In fact, a staggering 15,720 new businesses were set up between March 2012 and March 2013 in the Tech City/Silicon Roundabout area alone and this figure will almost certainly have risen substantially in the last two years.
To nurture this creative environment, the UK government offers a number of tax incentives to new businesses, and those that invest in them - including Entrepreneur's Relief and the Enterprise Investment Scheme. In addition, any company undertaking a project to bring about an advance in science or technology can reduce its corporation tax by claiming an R&D tax credit. There are also a number of grants and other incentives that can be applied for to get start-ups off the ground.
The final element that spurs entrepreneurs is the relative ease and lower cost of setting up a business in the UK compared with many other European countries.
It's true that salaries and housing tends to be higher in London than across Europe. As a business your salaries are higher but social security charges will most likely be lower than the rest of Europe. Your office rent will be higher for your business but you are personally more likely to make money from housing continuing to rise.
Apps and technology also serves London. AirBnB, Amazon, Doddle, Ocado, Uber, Wiggle, Zip-car are but a few of the many new internet businesses that not only thrive in a city like London but help make life easier, and cheaper in the fast growing London.
So we have language, infrastructure, jobs, favourable taxation, skilled resources and a growing densely populated market favours.
Building for tomorrow
The London skyline has dramatically changed in the last five years, and will continue to do so.
Iconic buildings of the past such as the BT Tower, One Canada Square and the Lloyds Building, are now dwarfed by the newer Shard, Gherkin, Walkie Talkie and Cheesegrater. But London's not finished there. In fact, 200 tall towers are proposed, approved or already under construction.
The vast array of cranes around the streets of London is testament that the city is growing and is most definitely on the up - both physically and metaphorically speaking.
Boris Johnson recently said: “With our unrivalled mix of investors, talent and creativity it is hardly surprising that tech businesses and entrepreneurs are clamouring to be part of the incredible London tech story. This sector has flourished beyond recognition in the last five years, creating thousands of jobs and outpacing the rest of the economy.”
In summary, London has everything going for it - venture capitalists, entrepreneurs, talented multi-lingual employees, and an influx of skilled resources with a variety of experience levels, fiscal incentives and a growing micro economy. All of this leads to a rising tide of prosperity that looks more dramatic in a Europe that is having a hard time restarting their economies.
Find your next job with techworld jobs