Currently adding £34 billion to the UK economy each year, the technology scene is on a path to outstrip London’s financial districts as the engine room of British growth.
The ‘Tech City’ cluster in East London has gone from strength to strength since its conception in 2008. The project has attracted some of the world’s leading technology brands, with a number of high profile, big money exits to Silicon Valley’s finest.
With original boundaries primarily incorporating Shoreditch and Hoxton, increasingly the project is considered to branch as far North as Angel and King’s Cross, East to Hackney and South to St Katherine Docks. The vast redevelopment of the largely derelict industrial space behind King’s Cross station has seen, among others, Facebook approved for a £650m ‘groundscrapper’.
Forecasters at the Centre for Economics and Business Research have highlighted Tech City has being the significant driving force behind London’s economic resurgence in the last 18 months. A number of start-ups conceived around ‘Silicon Roundabout’ in the late 2000’s have now matured and brought interest (and revenue) to EC2.
The diversity of the East London ecosystem lends itself to continued growth, with a wide range of digital and technology innovators clustering around the historically creative district. CEBR predicts a thirty-one percent increase in levels of employment in EC2 in the next two decades, compared to nice percent in its West End counterpart.
Regeneration as a consequence of Olympic investment has played an important factor in accelerating the growth of Tech City, and East London more broadly. Investment in infrastructure, housing, transport and redevelopment has transformed areas that were previously considered less than desirable. Property in and around Shoreditch is now experiencing unparalleled levels of demand.
CEBR pointed to the ‘post financial crisis’ era as one cause for growth in other sectors outstripping City performance. With a number of high profile financial institutions taking significant hits over the last 18 months, technology has increasingly been seen as a relatively low-cost, low-risk investment. Rapid scalability has also meant quick and substantial returns for investors, another attractive feature of tech start-ups in uncertain times.
An overreliance on the City’s financial districts as a contributor to the UK’s economic prosperity has been blamed for a deeper recession in London than elsewhere in the country. The City’s subsequent decline is also highlighted by a shift from West to East, as Hong Kong becomes the globe’s premier financial centre.
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