Is London Set to Become the New Silicone Valley in 2021?
Tech is becoming more advanced and more important by the day, everyone knows of Silicone Valley as the most famous tech hotspot but could it be that London is going to become more successful.
What is Silicone Valley?
The idea for Silicone Valley dates back a very long time, it’s because of the Wall Street Crash and the Great Depression that followed that we have this area at all. Silicone Valley is located south of San Francisco in the Stanford University area as it was a Stanford University teacher who is responsible for the creation of Silicone Valley. The professor of Engineer there Mr. Terman was concerned for his student’s futures because of the employment crisis associated with the Great Depression, he decided that he was going to create job opportunities for his students himself.
Two of his students he managed to secure grants for and they were the founders of the well-known high-tech company Hewlett and Packard. A decade later this professor became Dean of the engineering school at Stanford which gave him more power to help more students, he managed to claim federal grants for the engineering school and used this money to create the Stanford Industrial Park, the university leased land in this park to various technology companies including Lockheed and Hewlett and Packard and even to some biotech companies. This is what grew into the Silicone Valley that we know today that is home to big tech companies including the 4 biggest: Netflix, Google, Apple, and Facebook.
Why is Silicone Valley so Successful?
One of the main reasons Silicone Valley is so successful is because of how it started, lots of the companies there have founders who studied at Stanford together which creates a great atmosphere and they all try to cooperate and even promote each other as there is strong personal loyalty there, everyone wants to see everyone else succeed rather than viewing them as competition. Some other things that contribute to how successful Silicone Valley became are that it was easy for the companies there to collaborate which helps them to be innovative, California prohibited non-compete clauses which allowed employees who were outstanding at technology to leave and start their own companies and the area is home to many prestigious universities, not just Stanford who helped train tech staff including San Jose University and the University of California.
London’s Tech Scene
London’s tech scene has been on the rise over the last decade and it doesn’t look like this is going to be followed by a fall any time soon, Tech Nation gave London the prestigious title of Europe’s capital for tech collaborations as the sector is thriving so much. London is home to many tech firms and within the city, you’d be able to have any tech need you have fulfilled, there are lots of IT support providers in London and lots of innovative tech companies and everything in between.
The rise of London’s tech scene can be shown and verified by the numbers, in recent years London’s tech firms have collectively raised over £4 billion in investment, to show how successful this is a comparison is needed, Paris is the European city with the 2nd highest amount of investment into technology and they’re well below at £1.14 billion. The reason London is thriving in the tech industry is that they took a disaster and found new opportunities from it. Following the financial crash of 2008 uncertainty filled the city with job losses everywhere and more people than ever lacking financial security, this was a great opening for the most creative people as it allowed them to think up new ideas as the system clearly needed reform.
Similar to Silicone Valley, this great tech scene was created due to large levels of unemployment. London’s tech hotspot started in Old Street as rent prices there had dropped significantly allowing these tech enthusiasts to start up their own companies, now this tech area stretches all the way from Moorgate to Shoreditch and is still expanding. Low rent prices and original ideas were the main things that allowed this tech scene to become so significant but another thing that helped and gave London an advantage is that the UK government created schemes to help, such as tax breaks for investors in this industry attracting a huge amount of international investment.
Will it be the new Silicone Valley?
FinTech has become the new favorite for investors to invest in and London is more advanced in FinTech than those companies at Silicone Valley, this is reflected again in the numbers, Silicone Valley lost a quarter of its investment in 2019 but London remained steady. Also, many companies who have been at Silicone Valley for a long time are starting to focus on and expand their presence in London. It looks likely that London will overtake Silicone Valley as a tech capital.