In February, London mayor Boris Johnson visits New York City on a tech-focussed trade mission. Gordon Innes, chief executive of the mayor’s promotional agency London & Partners, says there are huge opportunities to forge transatlantic partnerships.
London and New York City are now clearly the world’s two leading cities for business. Each has an enviable list of strengths including financial expertise, hotbeds of talent supported by brilliant universities and superb cultural offerings that make both wonderful places for people to live.
Now, both cities are adding to their strengths, as each is creating fast-growing technology companies that are beginning to rival the behemoths formed in Silicon Valley. A decade or so ago, tech was not really on the radar of either city as an economic growth opportunity, as our strengths were seen elsewhere.
Today, New York is the leading non-Silicon Valley US tech hub, producing major companies such as news platform Buzzfeed, WeWork, an innovator in producing co-working spaces for tech firms; and Etsy, which has opened up e-commerce for boutique suppliers. These firms are having a global impact, disrupting existing business models and creating new opportunities for investment.
Equally, London is now the leading hub in Europe for digital innovation and tech creativity. Tech City, identified by the government as a cluster less than five years ago, is now the most exciting cluster in the continent, not only creating homegrown successes such as Mind Candy, but also pulling in the cream of European tech – firms like King and Spotify, which have all come to London to access the depth and breadth of creative talent and better reach international markets. And the success of these companies is transforming London’s economy, creating well-paid jobs for young people and helping a spirit of entrepreneurism to develop and flourish in our capital.
This success has been noticed across the world. According to figures released at the end of 2014 by research firm CB Insights and my company, London & Partners, the amount of venture capital invested into London’s tech sector in 2014 hit a record $1.4 billion – double the previous record set in 2013.
The major US VC firms are increasingly interested in London as an opportunity to invest in tech talent – indeed, Silicon Valley’s Andreessen Horowitz this month made a major investment in Transferwise, a financial tech firm founded in Estonia but now based in London. And we are also seeing more and more investment funds being set up in London itself by big names such as Google Ventures, indicating that the world’s smartest money is now well-tuned to what is happening on this side of the pond.
Why is this? Well, our companies are showing that they can scale up and are good returns on investment. For example, Shazam – a London-based music data company, whose brilliant tech tells you what that song is you’re listening to on the radio – this month announced that it has joined the ranks of homegrown, billion-dollar companies. This list includes names like Markit, Zoopla, JustEat and Rightmove, just to name a few.
London clearly now has the marriage of available finance, talent and opportunity that allows businesses to scale up and grow quickly to a position where they can compete on a global stage.
Although London has made great strides, we still need to tell the story of our progress to the world, in order to encourage more investment and further support the development of this sector. And we also want to partner with cities that are having similar successes and facing similar challenges, in order to create more growth and innovation. This is why a delegation of some of London’s leading tech companies – led by mayor of London Boris Johnson – is heading to New York (and then Boston) in early February.
London has particularly strong links with New York in terms of tech. Both are traditional hotspots for the creative industries, and there are huge opportunities for collaboration between both cities in media tech and adtech. For example, Shutterstock, one of New York’s leading tech firms, has just acquired London’s Rex Features to boost its international presence; while London companies, such as adtech firm Blippar, have expanded to New York to reach US markets. Both cities also have supportive mayors and governments, as well as access to capital due to their proximity to investors.
The cities also face similar challenges. As major financial centres, they were both heavily impacted by the global financial crisis, which has altered the banking sector in ways not yet fully understood. But this disruption, married with technological advances and the use of big data, has created new opportunities. Bright minds in both cities are now leading in the creation of new financial products. In particular, London is leading the world in areas such as cybersecurity, money lending and new ways to transfer funds – as befits the world’s leading centre for forex trading.
This visit by London’s mayor highlights the collaboration that exists between New York and London. It will also open doors for entrepreneurs in both communities, enabling an exchange of ideas and fostering a spirit of creativity. I fully expect both cities’ tech communities will continue to flourish, producing more disruptive gadgets, apps, and companies for many years to come.
Our message is clear. London is producing exciting companies, which are not only creating extraordinary products, but represent excellent opportunities for investment. Equally, US companies that have come to London – a list that includes leading names such as Etsy, Facebook, Twitter, Amazon and Google – have fallen in love with our deep talent pools and easy access to global markets, as well as our great city itself.