London’s ‘silicon roundabout’ inspiration for UK economic growth
Since 2008, the area in and around London’s Shoreditch area has seen an explosion of small to medium sized technology companies. Most of these companies are web based and are focused around the Old Street roundabout, hence the name ‘Silicon Roundabout’. The government has highlighted the growth of new businesses in the area as a real success story, creating huge numbers of new jobs.
In just three years, the Silicon Roundabout has gone from having just 25 ‘start up’ technology companies to 600 companies in November 2011. Famous brands such as Last.FM, Tweetdeck and SoundCloud are all based there, with the recent sale of Tweetdeck to Twitter for £25million highlighting its importance to the British economy.
While the prospect of a double dip recession looms and unemployment grows, the Silicon Roundabout goes from strength to strength, attracting ICT professionals from all around the world. Leading IT recruitment company, The IT Job Board, has highlighted a particular growth of both permanent roles and more flexible contract jobs, whilst Wired magazine reported in October 2011 that the ‘Roundabout’ is already attracting talent from the US. More than 50 top executives from Microsoft, Apple, Google, YouTube and Amazon have all left Silicon Valley to take up roles in small ‘start ups’ in the area.
The success of the East End program has not gone unnoticed by the government, who have named it ‘Tech City’ and set up a funded initiative - the TCIO (Tech City Investment Organisation) - to promote the area. The Chief Executive of the TCIO, Eric Van Der Kleij, told Wired “The technology industry is flourishing in the UK and digital and tech companies are providing increasing opportunities for employment with the sector contributing £66.4 billion annually to the economy." Such a boost to both IT jobs in London and the general growth of the economy is clearly a reason for David Cameron to take notice, at a time when growth is seen as a rarity.
Cameron has been keen to highlight key policy changes that he believes have contributed to the growth of the ‘Silicon Roundabout’. The BBC reported that these measures have included: a 225% increase in research and development tax credit offered to SMEs; a doubling of tax credit relief for start up businesses; and an ‘entrepreneur visa’ designed to attract talent from overseas. At the beginning of November, Cameron also launched the ‘red tape challenge’ - an opportunity for business owners and entrepreneurs to put forward ideas of how bureaucracy and innovative practices can help new businesses grow and develop.
There is no sign of a slow down in the area with new investments in infrastructure planned for early 2012, such as BT’s high speed internet service, to support the continued growth.