The London tech scene needs its champions, which is why it was so encouraging to see Boris Johnson open the day's trading at the London Stock Exchange (LSE) this week and encourage investors to back the science and technology sectors. This mayoral stimulus is exactly what's needed to help London's burgeoning tech scene move on to the next stage.
As the Mayor emphasised, emerging businesses need to be financially supported and nurtured. London is already home to the greatest concentration of tech firms in Europe and to enable this to continue, high growth small businesses need investment.
The Mayor is absolutely right to suggest that there should be a reduction or abolition of taxes on equity investment in order to widen SME access to equity finance. It is also essential, as the LSE is advocating, that the gap between the Main Market and the Alternative Investment Market (AIM) is bridged.
AIM was developed to meet the needs of smaller, growing companies from any sector or country who might not meet the full criteria for a listing on the main market of the LSE. Through initiatives such as The High Growth Segment, LSE is opening up market access to the SMEs that need it most.
However, for tech startups to really achieve the investment they require, there needs to be a focus on attracting more of the bigger corporates and institutional investors, to strategically invest in tech businesses as they move to later stage growth and in venture capital and private equity funds. Great progress is being made in developing early stage tech businesses, but as those startups begin to need deeper funding rounds (series B, C and beyond), it is the large corporate and institutional investors that will need to step up and enable these businesses to accelerate and scale their growth.
With the memory of the dot com bubble still fresh, it is understandable that they might be apprehensive about investing in high risk, high growth businesses, but this really needs to change. And fast.
The market is different now and London is quickly establishing itself as a tech and digital cluster. With greater capital, both in terms of seed investment and later stage funding, particularly from large corporations and institutions, early stage companies that show promise and potential are more likely to flourish and move into later stage growth phases.
Reputable corporations are already beginning to encourage the development of tech talent. The Google Campus in Shoredicth, for example, includes several floors of flexible workspace, with free high speed internet. It hosts many useful events, which are powered by the startup community, such as weekly mentoring programmes, speaker series and networking events.
Through the Tech City Investment Organisation, companies such as Facebook, Intel and Blackberry are working to inspire young people to study STEM subjects. This kind of support and mentoring is vital in order to nurture and up-skill our tech enthusiasts so that they can evolve into world-class talents. Last month, TCIO also teamed up with Hackney Community College to offer 500 unemployed young people in London the opportunity to work in London's most exciting and high-profile digital companies and to create an apprenticeship training centre in the Olympic Park broadcasting centre, providing up to 350 young people each week with the skills training they need to work in Tech City.
There is a lot of great work happening to develop and nurture London's technology scene as it looks to make a real contribution to the UK's economic growth. But we need more high profile supporters to champion London's burgeoning technology startups and to lead the way in enabling London's tech hub to reach its full potential. These technology advocates have the profile, means and influence to promote Tech London and help our unbeatable tech nucleus to become truly world class.
The Mayor's support for London's Tech scene is a great start, but it's important that his backing is only the beginning of this journey.