So #LDNTechWeek is drawing to a close and our guests are departing, but don’t be disheartened: London tech is sticking around.
CBR spoke to some of the attending experts about what trends are affecting the sector and what to expect in the future. Read on to find out about London’s tech unicorns, peer-to-peer funding, the effects of the Snooper’s Charter, government policies and how companies can get hold of the best talent.
1. Alastair Mitchell, Co-founder of Huddle, on tech unicorns and bullish investors.
"In the past few years, London’s infrastructure and plethora of global investors has decreased the barrier to entry for start-ups – creating a much more bullish environment. Both entrepreneur friendly, early-stage investor tax benefits and European immigration have all been major drivers for London’s resurgence. On top of this, the property and space available in London has expanded and opened doors for small businesses, particularly through co-working sites, allowing the flexibility needed for early-stage businesses. This, and access to funding, makes it easier for entrepreneurs to explore new ideas and for companies to quickly establish themselves on the scene.
"Thus, with more players in the market, the possibility of ‘unicorns’ – or $1 billion companies – grows. There have been 17 unicorns since 2000; a number that will only grow – especially given that London’s currently leading in the way in sectors like ecommerce and fintech. Speculation over the longevity of these unicorns is irrelevant. The point is, after the US, it’s the UK that’s leading the world in high-growth, innovative companies – something this London Technology Week has only further proved. That alone is enough to continue fuelling an increasingly vibrant economy that attracts world-class talent and world-class investment.
"However, we must not ignore that there is still a lack of local later stage expansion capital – which could hinder London’s ability to grow medium-term if not addressed."
2. Anil Stocker, Co-founder and CEO, MarketInvoice, on why peer-to-peer funding is taking off in the capital.
"It was Zopa, a London-based company, that pioneered the peer-to-peer model ten years ago and, though London continues to lead the world, peer-to-peer is increasingly a global industry. The rapid growth in peer-to-peer finance is a result of providers using cutting edge technology to create products that are quicker, simpler and cheaper than traditional bank finance.
"There is a healthy level of VC funding in London’s fintech sector and, as technology-led companies reform our financial landscape, there will be plenty of funds trying to back success. The only concern is that a lot of the funds investing in London’s fintech leaders are US-based, which could have significant implications on the future of the funded businesses, such as where they headquarter and where they list.
"The growth in P2P finance as a result of technological advances is long overdue in financial services and will ultimately result in consumers winning out from increased competition. However, we need to ensure that London continues to attract home grown VC funds in order to retain its position as the world leader in peer-to-peer lending."
3. Russ Shaw, founder, Tech London Advocates on why diversity is important to London tech and what needs to be done.
"Diversity is vital driver of success; it is a catalyst for innovation. It offers companies a pool of different creative ideas, drawn from people with a range of experiences. It is proven that a diverse workforce delivers better profitability. The capital’s tech sector can no longer ignore this brilliant asset. In order to stay ahead in the global tech game, London tech must maintain a disruptive mentality fuelled by diversity.
"Once London’s tech community has fully appreciated this, we must look to enact change – most pressingly at the senior levels of these organisations. Currently a quarter of London tech companies employ no women at senior board level, according to a survey of Tech London Advocates. This needs to change if we want to fully benefit from talent diversity.
"This need is a key reason for the formation of the Tech London Advocates Women in Tech Working group. As a group TLA Women in Tech aims to foster a supportive culture that promotes initiatives which encourage greater diversity across the broad tech ecosystem."
4. Gavin Ray, SVP Products & Marketing at ip.access, on the problem of poor mobile coverage in the workplace.
"It is pretty amazing that in an age where we have fridges that can tell you you’re out of milk; London is still faced with the age-old problem of patchy indoor mobile signal.
"Research conducted by ip.access in Q1 2015, with 2,000 UK office workers, found that UK businesses are losing over £30 million a week as employees spend an hour or more each week hunting for better mobile reception. This equates to a UK total of 2.53 million hours a week spent, which means a mid-sized enterprise of 200 employees can expect to lose £2,800 a week from this downtime.
"The research also indicated that; a startling 43 per cent of ‘higher managerial’ personnel at UK businesses have admitted they have to stand by an open window to take work calls on their mobiles.
"While companies across the UK are employing the latest technology to streamline processes and boost revenue, a reliable mobile signal has become a basic necessity, and the lack of one is having a detrimental effect on the productivity and flexibility of companies’ workforces. This surely feeds into missed revenue and growth opportunities."
5. Nick Leech, digital director at 123-reg, commented on the .london domain and how it is helping to build the London brand.
"Investing in geographic domains beyond your existing domain is a very effective way of expanding your business’ online footprint. The .london domain helps businesses connect with their target audience, put themselves at the digital forefront and offers a chance to be innovative. As the web becomes far more localised, this a unique opportunity for businesses, organisations and individuals to identify themselves directly with London and to secure a memorable domain name.
"London leads the way for investment, innovation and culture and is at the cutting edge of new technology. For the large number of start-ups battling to distinguish themselves in the Silicon Roundabout, a .London domain helps to mark them as viable and up-and-coming in the local tech community – someone who understands the digital world and the benefits that can be reaped from it. With over 60,000 registrations, it’s clear that London businesses are recognising these benefits and are keen to jump on the bandwagon."
6. Nick Halstead, CEO & Founder, Datasift on talent in the UK’s capital.
"What I thought was really interesting at London Tech Week was the number of conversations and debates being had about tech talent. The UK is supposedly a hot bed of ‘next young things’ but finding great people to work for you can be surprisingly hard.
"But not only is finding and hiring the best tech talent a challenge – keeping it can be an even greater one. The best people are always in high demand so there’s a constant risk that another firm will come along and poach them.
"If London is to continue to generate the most Unicorns in Europe and attract international investment we can’t ever stop investing in coding, programming and other initiatives that ensure the generation of tomorrow have the skills they need to continue to forge new digital frontiers. Our technological future depends on it."
7. Matthew McGrory, MD of Carrenza, on this year’s event.
"It’s challenging making valuable connections in the world’s most diverse city. But that’s what London Tech Week gives people in the tech industry the chance to do and it does that successfully in my opinion. London Tech Week gives us a week-long forum to network with our peers and share our ideas and views on any number of interesting topics.
"This year’s event has got my attention for a number of reasons. The attention grabbing headlines have focused on how we’re going to turn London into THE world’s leading technology hub and there has been a lot of purse-wielding incubators talking about how the funding process works.
"Personally I have been struck by the discussion around digital skills, particularly the lack of support for training in these skills at a time when they are so highly sought after. There has been a lot of focus on how to close the skills gap and it seems that bridging this gap and the influx of capital are the big challenges that lay ahead if London is going to try and cement its place as one of the leading worldwide technology hubs."
8. Ed Macnair, CEO, CensorNet on the Snooper’s Charter and how it’s affecting business.
"I’m sure I’m not alone in thinking that the Snooper’s Charter really isn’t good news for the technology industry. You only have to look at how quickly technology companies, like Eris Industries, are moving out of the UK, to realise how it’s understandably making corporations nervous.
"Of course, we are used to a certain level of surveillance – the Government has had sufficient powers for years and we are already the most surveilled society in the world through CCTV. Plus, GCHQ and the NSA have had access to our emails, web browsing activity and phone calls for years – yet we’ve still been victims of terrorism. But, unless you use very strong encryption then technology businesses should expect that all of their communications will now be read and if necessary acted upon.
"This charter is clearly taking it one step too far. If this Bill is passed into law we’ll almost certainly witness a huge exodus of technology companies following suit and heading overseas – a worrying prospect for UK businesses."
9. Hakan Enver, Ops Director at Morgan McKinley on remuneration and people moves.
"The interesting shift has been top developers snubbing the big banks for fintech and start-up firms. Professionals placed by Morgan McKinley with start-ups and fintech firms have received creative compensation packages. One leading tech firm offered a data developer £60,000 in shares to match his £60,000 basic salary with the option to acquire cash or increased shares on an annual basis.
"Whilst these innovative salary packages may not lure everyone out of the banks, it adds a very interesting dynamic in London to those who want to work in cutting edge environments and make smaller nimble firms a viable alternative to the big banks."
10. Mark Armstrong, VP & MD EMEA at Progress on government policy and education.
"Government initiatives so far to introduce digital skills and particularly coding into the curriculum should be applauded. However, the next government can do much more to get behind supporting this essential skill.
"With the rise of generation Z, an always on and connected society and a looming digital skills gap, coding should become an essential and mandatory skill taught from primary school up through until the age of 16 – it is a language in the same way that French, German and Spanish are, just one that is more applicable to business.
"Alongside the emphasis on nurturing individual talent, emerging developers must be encouraged to learn from and become involved in open source communities, where they can share ideas and build upon others’ skills. For example, open source repositories and libraries such as GitHub and Mozilla developer network are fantastic resources where young learners learn the essentials of submitting commits (track changes that recommend how to improve code). In the long term, the use of these repositories in business will create developers with an ability to creatively and rapidly create applications."
