Backing technology

The days when the City was a jealous guardian of its role as the top global financial centre has shifted to a more subtle position.

That earlier hostility was mainly directed at Canary Wharf, which is now a fact of life and has added to the global appeal of London. The new role is to foster the creation of an East London Tech City stretching from a roundabout in Shoreditch to the Olympic site in Stratford. Young entrepreneurs and new start ups are flocking to the area around Silicon Roundabout. Simon McGinn of the City of London said: “The City Corporation has facilitated the start up of an Innovation Centre in Smithfield which provides advice and guidance to SMEs (small and medium enterprises).

In fact, we have already actively supported the SME community for some years through the provision of affordable accommodation in City fringe areas.” He noted that the government was pushing the initiative hard with its vehicle, the Technology Strategy Board, having a £200 million war chest to help the high tech industry. In fact the government has taken its role to promote the Tech City aggressively as witnessed by its support for Eric van der Kleij as UK’s Trade and Industry’s“entrepreneur in residence.”

Also, Intel has thrown its weight behind Tech City, earmarking a supercomputer, capable of handling 2.25 trillion calculations per second, for startup companies in the area to use free of charge. The City of London has sponsored a scheme known as “Angels in the City” to recruit 125 investors prepared to put seed money into new companies. The scheme is in cooperation with the London Business Angels and aims to generate £10 million in new investment annually.

What attracts the young businesses to the area is that costs, notably rent, are relatively low and they are physically close to sources of funding in the Square Mile.

Access to these young companies is one of the reasons why Google and Cisco have moved into the area. McGinn points out that “it is hard to plan a cluster of like minded companies and entrepreneurs but in the case of Shoreditch there was already the framework for high tech operations because the creative industries had already moved in.”

The competition from other parts of Europe, notably Berlin and Dublin, is fierce. The advantage in London is the adjacent pool of wealth through individuals and financial institutions plus the experience of the City of London.