Swings and Roundabouts for UK Investment
Investments in technological companies in 2012 reached over the £1 billion mark – the highest since 2001. Is this where the future of the UK economy lies?
The figures aren't just indicating huge investments in this area but growth levels to match. The majority of the press attention has fallen recently on Old Street, Shoreditch – now affectionately (and optimistically?) dubbed silicon roundabout, or tech city and perhaps not without reason. The roundabout started with just 15 technology and digital companies which grew to 200 in just one year. Now the total is over 1,300 businesses operating in East London.
This isn't a coincidence; after an initial £50 million investment from the government, many investment and business support schemes are now established in this area such as public co-working areas such as The Trampery and Google's Campus, and funding schemes such as the Seed Enterprise Investment Scheme (which allows significant tax breaks for investors in UK businesses). There is also a notable effort to encourage overseas giant companies to create a base in the UK too, with the Tech City Investment Organisation set up in 2010 for the purpose, not to mention the up-coming affects of the dramatic cuts to corporation taxes announced in the Budget this year.
However, though this level of access to funding and the tight-knit Old Street community are undeniably beneficial to the businesses affected, there are concerns that the focus is not wide enough. By focusing on the publicity-friendly 'silicon roundabout' in Old Street are the government and investors missing other areas of high potential growth?
For example, just to prove tech city is not the only place in the UK bursting with investment-hungry technological and digital companies, Cambridge is home to companies such as ARM and products like Raspberry Pi . Many are concerned that, given the less domestically recognised names of the Cambridge companies this area is missing out on vital funding that could boost not only the companies themselves but the whole of the UK. Its relatively central position in the country and strong links to world-renowned Cambridge University provide the perfect foundation for business success, not only bringing the UK's greatest up and coming tech talent into the area but extending its reach for talent world-wide. Could this be a sorely missed opportunity for investment for the sake of the publicity garnering London IT cluster?
The Science and Technology Committee have recently released a report on this subject voicing concerns that investors may be missing the bigger picture for UK businesses. The focus of their report is not specifically on investment outside of London, but the Chair of the Select Committee MP Andrew Miller highlighted the importance of areas like Cambridge:
“The UK’s university and science sector is a global success, but the challenge for Government is how that world class academic research can be translated into commercial activity.”
The report also suggested investors and the Government should focus on providing support to these companies beyond the first few years in order to allow them to grow beyond that first, small existence.
Are you involved in a UK technology company? Do you think enough is being done, in the right places, to support businesses like you? Let us know at email@example.com.
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