London is increasingly becoming recognised as the ideal destination to grow technology companies, with one of the biggest and most varied startup scenes. Having successfully established itself as a global player in the industry, recent reports confirm the digital sector in London has been driving the capital’s economy. In fact, London’s digital technology sector is growing faster than both the London and wider UK economy. London’s tech startups are continuing to secure record levels of funding, emphasizing the rate of growth for the sector across both London and the UK. Mark Gregory, UK Chief Economist at EY reported: “In the eyes of international investors, London is a truly world-class magnet for technology investment.”
However, London is not alone in its success; so how does it compare to European competitors? According to research conducted by EY, 1,000 “international tech investment projects” based themselves in London between 2005 and 2014, compared with 381 in Paris – and 853 in the whole of France. Gordon Innes, Chief Executive of London & Partners confirmed this, suggesting, “Over the last decade more international tech investment projects have come to London than Paris, Dublin, Madrid, Amsterdam and Munich combined.” That’s not to say there has not been growth across Europe, with many different cities establishing themselves as startup destinations. Namely, Swedish startup Spotify has been central to the rise of startups in Stockholm (Stockholm is actually the world’s second most productive tech hub on a per capita basis, behind Silicon Valley), the likes of fashion ‘e-tailer’ Zalando growing the increasingly customer-focused market in Berlin, and consistent growth in Paris and Amsterdam.
So how long will this lead last? Recent reports suggest the rising rent prices in London present a large hurdle that could have potential to damage the growth to the tech industry. London is currently named as the number one destination for digital startups in Europe, but could these high rent prices be the city’s downfall?