The Elephant in the Room at London Tech Week
As the capital kicked off its annual festival of technology and entrepreneurship, one word was lingering on people’s lips – the issue of Talent.
Last Thursday a panel of start-up founders, angel and venture investors gathered at East London co-working space Second Home (that’s the spaceship looking one in a very Prosek shade of orange) to discuss the future of the UK’s digital economy and how the landscape might evolve over the next five years. This sort of forecasting exercise imposed upon a panel of experts is a pretty regular feature on any speaking agenda, but given recent UK political uncertainty, the panel sparked a more interesting debate.
Asked to name her top concern, Reshma Sohoni, Co-Founder of Seedcamp (investors in pre-seed and early-seed stage start-ups) immediately shouted out the T-word. It was the issue the panel kept returning to. A high-skilled and readily-available workforce is fundamental to the tech industry’s growth and success, so it’s not hard to see why access to and retention of Talent worries business leaders and investors.
£6.8 billion was invested in the UK’s digital economy last year – that’s £4.4 billion more than France, which comes in second, and £5.4 billion more than Germany. If you were in the business of handing out the crown for European Tech Capital you’d be hard pressed not to choose London, which produces £97.5 billion for the wider UK economy according to Tech City UK. So why the anxiety? It comes down to government policy which is distracted by Brexit and lacking a leader prepared to champion the interests of this industry.
A ’hard’ Brexit that takes the UK outside the EU customs union and ends freedom of movement could hit the tech sector badly. At stake is the potential loss of a well-funded and attractive environment for academics and access to highly-skilled graduates from the EU. Dominic Jacquesson, Director of Talent at Index Ventures made the point that we will not have clear figures showing which start-ups have been born elsewhere in Europe until five years’ time when we could suddenly see a lot fewer tech firms in London. Although the practical mentality of start-ups is admirable and their focus on day-to-day business tasks a sign of resilience against change, the panel all agreed that now is a critical time for the development of effective policy and for the City and tech sector to make their concerns heard.
It was encouraging then, that as a tonic to the pervasive nervousness around the Talent problem, the rest of the week saw a number of initiatives supporting the claim that #LondonIsOpen. Mayor Sadiq Khan unveiled his commitment to maintain London’s position as a technology hub with the launch of Plexal – Europe’s largest ‘technology innovation destination’ that will house 800 tech start-ups and global corporations from across the world. Similar commitments to the sector included a £1.6m clean tech incubator launched to help make London the world’s leading Smart City and a Smart Mobility Innovation Office to bring technology such as driverless cars into the mainstream.
While increased capital and support for grass-root innovation is always welcome, the question of how London will continue to attract the brightest and the best remains to be seen. In a week where France’s newly elected President announced the launch of his ‘Talent Passport’ initiative and pledged to create ‘a country of Unicorns’, the race is on for other hubs to leverage Brexit to their advantage.
So what might this future Europe look like? In time, we may see a dispersion of specialised tech hubs across Europe rather than the centralisation we have today. The UK for example is already a strong performer in software engineering, home to the creators of the Amazon Fire’s artificial intelligence technology, Alexa, and one of the largest tech acquisitions in recent years (ARM holdings’ sale to Softbank for £24 billion). This much at least is clear – whatever the future holds, a strong commitment from government and corporations to continue promoting investment in the technology sector will help keep London at the forefront of tech innovation.