Tech Firms Report Great Struggles In London
Regional cities are reported as the place to be for technology firms, as 70% of those working in the Capital have reported huge struggles.
155 tech managers working in London were surveyed by YouGov, and seven out of 10 of those said their business has faced barriers to growth. The most common reasons included the cost of running the business (48%), lack of qualified staff (24%) and affordable office space (25%).
But six in 10 of the digital firms surveyed pointed to the potential of moving business away from London, saying that the UK would benefit from having bigger, stronger tech hubs outside of the Capital.
More than half think the rising costs in London would drive the growth of other regional tech hubs, while 37% thought the better quality of life outside of the Capital would do the same.
In regional cities like Manchester or Birmingham, state of the art office space for digital companies comes at a third of the cost of London property.
Lawrence Jones, CEO of Manchester-based hosting and colocation firm UKFast, said: “To do anything at the forefront of the industry there has to be a layer of creativity, being at that cutting edge.
“If you work in an environment where you’re on top of each other – and London is a very tense environment, even just getting around – you can’t be cutting edge.
“If you look at a successful person’s environment, there’s probably a lot of space – room to think – I think this applies if you’re trying to build a creative technical company.
“UKFast have seen a huge growth curve at three big notable stages in the last decade and each time it’s coincided with an office move where we’ve moved into bigger spaces. We’ve slowed down when we’ve had to cram everyone in.
“Regional cities, like Manchester, are taking advantage of this opportunity. Our creative environments are growing. This is where the fresh ideas are at.
A Tech City UK – a technology cluster based in East London – spokesperson defended the Capital, saying: “This is not a picture we recognise. We now have over 1,500 companies benefiting from the access to talent and investment that the Tech City community provide. Rents in Tech City are still very competitive, with increases caused by demand from a lot of growing companies combined with constrained supply.
“We’re working hard with developers to help them understand the needs of growing tech companies to help increase affordable office space. We’re also collaborating with other technology clusters from around the country including Birmingham to share ideas, thinking, resources and learnings in order to build on our collective success.”