New Tech City Investments Are a Further Boost to Britain's Digital Aspirations

Berlin and other European cities are busily building their own digital clusters and have set their sights on being Europe's preferred destinations for the hottest new firms and the venture capital that will follow.

The Autumn Statement announcement that Tech City will receive £50m of Treasury funding for development of the Old Street area is a further welcome move in the continuing upward curve for this unlikely 'hotspot'.

In a further demonstration of the government's ongoing commitment to developing the UK as a leading centre for digital startups, the prime minister last week declared his aim of making East London "one of the world's great technology clusters" with new investments from organisations including KPMG, Microsoft, University College London and IBM.

In his Mansion House speech last month and again in Tech City last week, Mr Cameron stated that the UK is in a "global race" for technology leadership. "As well as backing the businesses of today, we are creating an aspiration nation and also backing the innovative, high-growth businesses of the future,", he said. He could not be more right.

Berlin and other European cities are busily building their own digital clusters and have set their sights on being Europe's preferred destinations for the hottest new firms and the venture capital that will follow.

A recent BBC report on Berlin's potential highlighted the abundance of digital firms in the city and claimed that it could be a serious challenger to London's technology aspirations.

Also last month, Telefonica Digital released a fascinating report into the hottest digital centres in the world today. London was flagged up as the city whose startup community has experienced the most significant growth in recent years, but the report highlighted several barriers to growth that could stop the city from becoming a serious challenger to Silicon Valley. Foremost was the fact that access to capital, and, in particular, early stage venture funding (post angel investing) drops off a cliff in London in comparison to Silicon Valley.

Getting motivated and educated talent into these businesses will also be something to monitor, especially as other European centres will be trying to attract the same startups and entrepreneurs. With such competitive pressures, Mr Cameron's support for the capital's technology industry is very welcome and while the government has been criticised in some quarters for badging the nascent tech scene "Tech City", I see great value in having the Prime Minister backing a sector of the economy that is focused on growth, jobs and value creation.

According to an FT report, the £50m investment will go into developing the Old Street roundabout area with a new "civic centre for start-ups and entrepreneurs" called Open Institute. I have seen some early versions of this, and it is very impressive.

Due to be completed by 2016, the building will host training activities, exhibitions, events, workspaces, a 400-seat auditorium and a 3D-printing centre. Under the plans, the complex will have the capacity to train 10,000 students in programming (yes, more coders are needed) and business skills, as well as host technology conferences, the FT reported.

If these moves help attract further investment to the area and ensure that the global tech giants - from Amazon to Microsoft, from Google to Telefonica - continue to bring their might to the area, the government is doing many good things to give the UK's growing tech cluster a better than fighting chance against the rest. Bring it on!

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