This article was originally posted on the Tech City UK website.
Right across Europe, our competitors are jockeying to steal the UK’s crown as Europe’s leading digital tech nation. Some think Berlin is snapping at London’s heels, while in France, President Macron is trying to make the French capital Europe’s new startup hub. Station F, a fantastic new facility in a converted railway depot in Paris, has opened with 3,000 spaces for early-stage companies.
But the UK has built its position as Europe’s tech centre for many reasons and that advantage will not be lost overnight or even in a couple of years. Indeed, if our neighbours do make a success of bolstering their tech sectors, it will be good for the whole European tech sector, in giving the titans of Silicon Valley something to look over their shoulder at.
In sectors like transport, aerospace and energy there has long been collaboration between British companies and French ones. The Channel Tunnel was a great engineering feat that we completed together, as were our joint space missions, with other European partners.
It would be great to see that spirit of co-operation carry over into the tech sector. There have already been some joint initiatives – in 2016 the UK Government launched a joint Anglo-French taskforce focused on harnessing the powers of data for enterprise – and it would be good to see more.
If Europe is to succeed in producing a tech company that is capable of global dominance – like a Google or a Facebook – we need to think about working collaboratively across the region, rather than just fighting between ourselves. That is why, as someone who has lived and worked in both Paris and London, I welcome French plans to reform labour laws and echo the policies that Britain has had for decades. Now more than ever, as we dismantle old structures, it is time to be honest about what works and what does not.
Since the Brexit vote last year, the UK’s tech sector, while initially shocked, has shown resourcefulness and resilience. Although a genuine concern, there has been little sign of a slump in hiring or investment. Last month augmented reality company, Improbable, raised the largest European tech investment ever, over $500M, showing that fears about continuing investment in the sector were overdone. When Tech City UK surveyed 2,700 people for its Tech Nation 2017 report, it found that 78% of London’s digital tech businesses were optimistic about the city’s prospects for digital growth.
The latest research from London & Partners, part of the Mayor’s office, shows that since last year’s referendum British tech companies had received £2.4bn of venture capital funding. This was more than double the VC investment in Germany and three times what it was in France. It also comes on the back of a very strong 2016, when the UK secured £6.8bn, more than twice as much as any other European country and significantly more than France, which secured £2.4bn.
But we need to be realistic that young ambitious Europeans are now likely being fed a negative story about our economy and our prospects. We must do everything we can to counter this and continue demonstrating that our tech sector is thriving. This is important because it is the smallest companies at the beginning of the startup funnel that are the most footloose and can shift location easily, in search of incentives or a ready pool of talent. Without the small fry, you will never have the bigger fish that become the later-stage successes – the likes of Skyscanner, Zoopla, BrandWatch and Deliveroo.
The UK is one of the easiest countries in the world to start a business and French tech companies have, up until now, looked with envy across the Channel at British labour laws. Across Europe, politicians have admired and tried to emulate our thriving culture of investing in startups, helped by generous Government-backed enterprise schemes, grants, R&D tax credits and entrepreneurs’ capital gains relief.
Another advantage of London that will not disappear overnight is the City. Having the second biggest financial market in the world, outside New York, on your doorstep really helps UK technology companies when they are starting to scale up. UK companies raised £385 billion through equity issues over the last decade and the UK is second in the world for tech startup exits according to CB Insights.
Then there is our language and time zone. Half way between Asia and the West Coast, it’s no surprise that all the big US tech giants have their European base here, as do many of the biggest venture capital funds.
And in London we have one of the most multicultural cities in the world, which continues to be open to foreign tech talent from all over the globe. To make sure it stays that way we have introduced initiatives like the Tech Nation Visa scheme and Entrepreneur visa routes to attract the best and brightest entrepreneurs.
If you are looking for raw talent, our universities are world class and produce over 5,000 new STEM PhDs per year. There are over 170 universities in the UK, with six in the world’s top 30. Only the US has produced more Nobel laureates.
As a nation, we also have a passion for technology and are voracious early adopters. We spend more time online than any other European country, according to Ofcom, and spend more than double the next European country (France) online per capita.
Google’s Eric Schmidt says that change comes in small increments or in giant leaps, which he called moonshots. Out of adversity comes innovation, creativity and change.
With Brexit must come opportunity to go for the moonshot and start afresh on many new things. It must encourage new ways of thinking, introduce new trade routes and stimulate the economy by sweeping away restrictive regulation. If the response of our European neighbours is to raise their game, then that is great for all the companies in the European market.
Britain has tech in its DNA and we understand that this is a global industry, not one that can easily be confined or indeed taxed by physical borders and regulations. Quite soon, we will look back and see Brexit as a point where we aimed beyond Europe to see the whole world as our market.
This article was originally published in The Telegraph, available here.
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