Tech Powers the London Economy The Tech City 3rd Anniversary Report

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Like most entrepreneurial initiatives, Tech City

began with an ambitious mission: Turn East London

into a global hotbed of innovation, entrepreneurship

and creativity. For an area better known for its street

art than its startups, this sounded like a lofty goal.

Yet three years on, a real transformation has

happened, not just in East London, but in all of

London. From a city previously reliant on the

financial services industry, we have established

London as Europes digital capital and a true

challenger to Silicon Valley and New York.

The results werent late to follow. The number of

tech and digital companies in London almost doubled between 2009 and 2012, and

there are now over half a million people employed in the sector, driving 27% of all

job growth across the capital. Whats more, jobs in this sector have grown by 16.6%

during the same period, against an overall growth rate of 0.3% across Great Britain.

We are living through an amazing period of technology-driven creativity and

innovation that holds the potential to transform society, culture and business on a

mass scale. The UK has a pivotal role to play. Accordingly, this report outlines our

recent achievements and provides a blueprint for the future.

Weve come a long way in three years but this is just the beginning. Weve

proven that we can accomplish great things when we set our minds to it. Now our

challenge is to build on that foundation and ensure that the next generation of

entrepreneurs and their investors see the UK as the best place in the world to

imagine, start and grow a business.

ForewordWe are competing in a global race and I am absolutely

determined to make Britain the best place in the

world in which to start and grow a business. The world

of business is changing rapidly and one of the most

promising opportunities for new jobs and growth lies

within a new wave of high growth, highly innovative

digital businesses. This is why, as part of our plan to

help Britain succeed, we established Tech City UK to

support the creation of a technology cluster in East

London and committed to help these businesses to

become cornerstones of our economy.

Weve had real success. Today Tech City serves not only as an example of how a

city can be transformed into an engine for growth and innovation, but it is also a

blueprint for fostering growth that has been recognised globally.

The combination of the right policies, the right people and the right programmes,

backed by a Government that listens and takes action, has led to some of the

worlds best entrepreneurs and their companies choosing the UK as their home.

Weve removed the obstacles to success one by one and, by creating new policies,

developed in direct response to the needs of start-ups and entrepreneurs we now have

a compelling package of support for entrepreneurs and businesses at every stage.

As well as backing the businesses of today we are also backing the businesses of

the future and in just three years we have seen London become a leading centre for

innovation, helping to drive our economic recovery.

But this is not just about London. We are determined to build a rebalanced economy

across the country and get behind the entrepreneurs imagining a new tomorrow in the

dozens of technology clusters, accelerators and start-up incubators across Britain.

David Cameron MP, Prime Minister

Joanna Shields, Chief Executive, Tech City UK

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New government policies backed by Tech City, such as the Enterprise

Investment Schemes, R&D tax credits, the Patent Box and a mandatory

opening of Government Procurement to small companies have already

made a significant impact on the sector. Initiatives such as the the Future

Fifty programme, the creation of the new FTSE Digital Services Index and the

High Growth Segment on the London Stock Exchange reflect the growing

importance of high growth technology companies to the UK economy. Finally,

changes to IPO regulations will act to catalyse higher rates of lisitngs, while

the strengthening of regional technology clusters is creating a landscape

favourable to the growth of digitally enabled firms across the country.

In a landmark initiative supported by Government, the Open Data Institute

launched in Tech City in December 2012. Today the UKs open data

infrastructure is world-leading, with over 10,000 public data sets, and the

ODI have announced the creation of 13 nodes around the world to support

open data projects and encourage cooperation to solve local and global

issues and problems.

Ensuring future growth will require continued collaboration between

Government, local authorities, communities and the technology clusters

they are home to. The good news is that the momentum generated by the

tech/digital sector is not only supporting our economic recovery, it has also

catapulted the UK to become one of the worlds leading digital economies.

And if the results in this report are any indication, the UK is well on its way to

becoming the best place in the world to imagine, start and grow a business.

executive SummaryIn 2010 a new breed of digital companies was beginning to emerge in

East London. Young, innovative and nimble, these startups were using technology

to reimagine industries as diverse as finance, fashion, advertising, media and

gaming. Recognising the potential behind these companies and their unique

requirements for growth, Prime Minister David Cameron created a new initiative

to support the development of this technology cluster in the heart of East London,

and called it Tech City.

In November 2010, Tech City was established to identify the needs of the cluster,

attract inward investment, act as a liaison with

the government to remove barriers and

create opportunities for future growth.

Three years later and Tech City has

become not only a national success

story, but also an international one. The

cluster is now recognised as Europes

digital capital. Technology leaders such

as Google, Amazon, Samsung, Intel

and Cisco have all set up offices in

the area, followed by fast-growing

startups such as Hailo, MindCandy,

Unruly Media, Transferwise, Import.io

and Huddle.

Led by the expansion in East London, the Capital has experienced

considerable growth in the tech/digital sector between 2009-2012. Some key

findings in this report include:

During the period between 2009-2012 the number of tech/digital companies incorporated in London grew by 76%.

Employment in the tech/digital sector in London grew by 16.6% against an overall growth rate of 0.3% acrossGreat Britain.

A staggering 27% of all job growth in London now comes from the tech/digital sector.

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acknowledgmentSTech City UK wishes to thank the following individuals and organisations

for their support in the production of this report:

Our Data Partner: EMSI a CareerBuilder Company

10 Downing Street, UK Trade and Investment, London and Partners,

Department of Transport, Department for Business, Innovation and Skills,

Cabinet Office, Government Digital Service, The Technology Strategy Board,

The Open Data Institute, The London Borough of Hackney

McKinsey and Company, Blue Rubicon, The London Stock Exchange Group,

Barclays, The British Venture Capital and Private Equity Association

Imperial College London, University College London, Ravensbourne, Hackney

Community College, Newham College, Massachusetts Institute of Technology,

General Assembly, Entrepreneur First

Passion Capital, Index Ventures, Decoded, Booking Bug, Berg, EE, Cisco,

Samsung, Intel, O2, Google, BT, Box, Eventbrite ,Tech Hub, The Trampery,

White Bear Yard, Warner Yard, Central Working, Tech Stars, Seedcamp,

Tech London Advocates, The UK Business and Technology Cluster Alliance

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The following pages highlight the performance of London and East Londons

tech/digital sector between 2010 to date. The significant increase in

performance against key indicators reflects a tremendous growth story

for this sector. In looking at this growth, we will also

look to the work and dedication of the many key

players within Londons tech/digital ecosystem.

Their efforts cannot go unrecognised when

examining the Tech City story.

We then look at the initiatives taken in the

three main areas identified as priorities:

1. Raising awareness by shining a spotlight

on Tech City,

2. Attracting inward investment,

3. Steering policy decisions to address barriers

to growth such as lack of talent, skills, and

financing, and rewarding innovation, opening

up government procurement to small business,

nurturing growth stage businesses and improving infrastructure.

This report outlines recommendations from the business community,

policy initiatives and programmes developed to ensure that Government

can continue to remain in step with the rate of change brought about by

the tech/digital sector and outlines for Tech City UK in 2014.

TECH CITY: THE BEGINNING

In November 2010, Prime Minister David Cameron outlined a compelling vision for

East Londons future as a world-leading centre:

The vision for Tech City was bold and ambitious. The area was always known as a

creative hub, but its reputation was local, or at best national, rather than global. As such,

East London was not attracting substantial foreign investments or gaining the critical

mass that was required for a world leading tech/digital cluster.

To help fulfill this vision, Tech City UK was established to work with other partners

and stakeholders to promote and support the growing cluster of technology and digital

businesses in the area. During this time, the area known by locals as the Silicon

Roundabout has become the nucleus for the digital revolution that has swept

across London, catapulting it to become the worlds digital capital.

As s part of our strategy for growth, weve made a really important decision. Were not just going to back the big businesses of today, were going to back the big businesses of tomorrow. We are firmly on the side of the high-growth, highly innovative companies of the future. [This is] our vision for East London Tech City.

David Cameron, Prime Minister (Nov 2010)

Our competition is only going to be in other cities that have similar kinds of characteristics. And the city that comes to mind is London.

Michael Bloomberg, New York City Mayor

Even though there were a growing number of tech companies around Silicon Roundabout, it didnt feel like there was a real network in Old Street of like-minded companies, sharing knowledge, expertise, and contacts. We knew that if we could ignite the area, wed not only be working together, but that would bring in more people, more ideas, publicity and the services we needed a proper community. And ignited it has. In a few years, its gone from being a fragmented scene to an entire ecosystem its a great place to be in.

The community of knowledge is excellent, much better than it has ever been. There are start-up specific services that were hard to come by before, from legal services to job fairs; from meet-ups to co-working spaces. And its now a place that VCs visit, so theyre easier to meet and they can see the energy in the area. Its incredible to see the development of Tech City.

Matt Webb, Founder and CEO, BERG

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GRowTH IN LoNdoNs TECH/dIGITAL sECToR

of job creation in london came from the tech sector

NumBER of TECH/dIGITAL ComPANIEs INCoRPoRATEd IN LoNdoN2009-2012

2009-2012

Between 2009-2012, East Londons tech/digital sector accounted for 40% of all job growth in the Tech/ digital/media industry in Great Britain.

In East London, there are approximately 140,000 people working in the core tech/digital occupations, of which, 88,000 (63%) work in the Tech/digital/media industry.

Jobs outside of the tech/digital sector grew by 8.4% vs 6.0% in London overall.

Between 2009 and 2012, the number of people employed by the tech/digital sector grew from 499,000 to 582,000.

In the same period, the net growth of jobs in Great Britain was 0.3% (all industries considered).

In 2012 alone, people employed within Londons tech/digital sector earned over 28 billion in salaries.

Between 2009 and 2012, the number of tech/digital occupations grew from 381,000 jobs to 438,000, representing an increase of 15%.

See appendix for definitions/methodology

The tech/digital sector grew at a rate of 16.6% in London between 2009-2012, against a growth rate of 6.0% in other industries. This means that Londons Tech/digital/media industry grew 2.7 times faster than all the other industries.

27%

49,96963,099

77,34388,215

2009 2010 2011 2012

# of people employed

Growth rate

tech salaries

tech occupations

in

East Londons FLat WhitE Economy

jobs are in the tech/digital sector.

In London, between 2009-2012, the net growth of jobs in the Tech/digital/media industry was equivalent to 27% of the net growth of employment across all industries.

In London, job growth in the tech/digital sector outpaced job growth in all other industries:

THE ECoNomIC EffECTs of THE CLusTER

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sHINING A sPoTLIGHT oN TECH CITYStarting from 2011, Tech City UK undertook a variety of activities to promote and advocate for the cluster of technology businesses based in East London. Since then, the Tech City UK team has spent thousands of hours telling the story of the UK technology sector and reaching millions of people in the process.

Central to the Tech City story has been the phenomenal success of young

innovative firms disrupting traditional business models. Start-ups such as

Shazam, Hailo, Transferwise, Zoopla, Just Eat, Huddle, Achica, MOO.COM

and Swiftkey are leading the way in creating new products and

business models and are as a result experiencing

phenomenal growth. Another central component of

the Tech City message has been the support the

Government has shown the technology

community through an ambitious package of

globally leading policies designed to support

businesses at each stage of their lifecycle and

ensure that London and the entire UK is the

easiest and most attractive place to start and

grow a digitally enabled business.

Following this success, Tech City grew

geographically and expanded well beyond East

London. This broadening of scope was a reflection of

the growing presence of start-up activity across the city,

and the increasing convergence of digital technology with

Londons other key industries: finance, fashion, music,

advertising, media and others. The result was an increase in promotional

activities centred on the message that London is the ideal destination for

start-ups and growth stage companies, and the most suitable destination

for foreign firms to base their international headquarters. As such, 2013

reflects tremendous growth in reach and visibility for London as the

fastest growing digital capital in Europe.

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Volume of tweets talkinG about tech city dec 2010 - noV 2013

tech city uk team outreach

national and international outreach & awareness events attended by the Tech City Team

International delegations hostedoVer 80oVer 1000

dec 2010- noV 2013155,725

full list of countries where tech city coverage has appeared nov 2010 - nov 2013

United KingdomUnited StatesIndiaChinaGermanyFranceIrelandCanadaAustraliaIsraelDubaiUnited Arab EmiratesJapanSingaporeSouth KoreaQatarRussiaChileCroatiaCzech Republic

South AfricaPortugalSwitzerlandLithuaniaSyriaItalySpainBelgiumLibyaGreeceSaudi ArabiaFinlandNetherlandsMexicoMalaysiaLatviaPakistanSwedenDenmarkBrazil

number of articles written over time:

2008

432009

582010

1472011

8022012

1,4222013

2,526

a GLobaL brandtotaL oF 5,003 articLEs

Geographic spread (where published) of the 5,003 articles referencing Tech City ANd London (Nov 2010 - Nov 2013)

Referencing TECH CITY and LoNdoN (Jan 2008 - Nov 2013)

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Increased global awareness of Tech City and London has led to a significant rise in interest from international firms looking to set up in the Capital.

A key driver behind this increase has been the partnership between Tech City,

UKTI and London & Partners who have collaborated to attract investments and

partner with many international and domestic firms such as Samsung, Warner

Brothers, MassChallenge, EE, The Loop, Kiosked, Payango, Cisco, Google,

ZipZap, Quirkat, Huawei, Brightstar, Kano, eToro, Box, Survey Monkey,

Shopzilla, Eventbrite and iZettle to name only a few.

These organisations together have worked to deliver 159 tech/digital firms into

the area between 2011 and November 2013. This activity will directly generate

5,762 new jobs into London over a 3-year period and will indirectly generate an

additional 6,684 jobs.

Londons real estate investment market is also on the rise. According to ULI and

Nabarro Real Estate, London has been the most traded market in the world in

2013 with over 50% of central London commercial real estate in the ownership of

overseas investors. Between 2009-2013, Knight Frank estimates that over 28

billion has been invested in commercial property in the Tech City post codes, and

in 2012-2013 alone Savills estimates that tech/digital firms have taken up over

4 million square feet in office space across the Capital.

Building out our international headquarters in London was the perfect choice for Box as a rapidly growing enterprise software company. London has all the elements you need for a strong startup community to blossom and evolve. With the government support and the mix of

capital, talent, universities, companies and startups, there is tremendous

innovation and talent beginning to emerge.

Aaron Levie,Co-Founder and CEO, Box

THE GLoBAL TECH CITY: dRIvING INwARd INvEsTmENT

At General Assembly, whenever we look to open a campus in a major

new city, we appreciate opportunities to partner with Government because we

believe in the power and potential of public and private partnerships to provide

skills based education. We have found in the UK that the Government

recognises and embraces the need for companies like General Assembly to

exist and enable this practical, outcome-focused learning to fill the skills gap so

many countries are facing when it comes to technology, business and design.

Being located in Tech City was the natural choice for us as we work

hand-in-hand with the community, in terms of sourcing instructors, attracting

students and providing apprenticeship placements.

Matt Cynamon,Regional Director, General Assembly

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London offers the most welcoming and flexible commercial environments in

Europe thanks to business-friendly legislation, lack of red tape, and low taxation.

Furthermore, a pool of diverse talent, skills, expertise and ambition, combined with

Londons geographical location, gives unrivalled accessibility to the rest of Europe.

London is also home to a world leading financial hub, offering access to Europes

largest venture capital community; and a test-bed of sophisticated early adopters,

making the city particularly attractive to ambitious companies looking to test ideas

and accelerate their growth.

Nowhere is this better evidenced than in the phenomenal success

of Tech City the beating heart of Londons new economy. Home

to Europes largest concentration of tech start-ups and with an

impressive track record for turning innovative ideas into profitable

businesses, London companies are helping us relax on private

islands (Airbnb), pay securely using our smartphones (iZettle),

and raise cash from crowds (Seedrs), all at the click of a button.

Equally, bigger businesses including the likes of Facebook, Cisco

and BMW are attracted to this extraordinary environment, seeking

the entrepreneurs of today to help them innovate and grow.

Londons competitive advantage is this unique partnership; nowhere else in Europe

will you find such an exciting convergence of big brands and start-ups, funding,

political backing and talent. Programmers, cutting edge creative thinkers, data

scientists, educational innovators, financiers and marketers from across the world

are fusing together harnessing Londons resources to grow their ideas, and helping

to cement Londons standing as a leading global tech hub.

London & Partners has been honoured to support the growth of the cluster around

Tech City, influencing more than 60% of recent investment, and attracting and

supporting major tech conferences and events across the capital.

We are committed to continuing our support in the future to grow the cluster, so

that companies with new ideas can succeed and scale their businesses in London,

ultimately driving the digital economy into the future.

Gordon Innes, CEO, London & Partners

the london Borough oF hackneyThe London Borough of Hackney encompasses the Old Street Roundabout and

Shoreditch areas of East London, a significant part of the area know as Tech City.

For us, supporting the creative tech sector has been a major priority of our business

development and economic policy. In terms of physical infrastructure, weve protected

the commercial space, developed an attractive public realm with a vibrant street life

culture to go with it; and we work with developers to ensure that new work spaces

offer a portion of affordable, usable workspace for start-ups and young creative tech

businesses. We help shape the local culture championing smaller independent

cafes, restaurants and pop-up food, art and galleries a vital part of the areas

cultural and business mix.

Hackney Council helps showcase the best in creative tech.

In 2012 we created Hackney House a 10,000 sq ft pop up

business and performing arts pop up venue in Shoreditch

which ran from May to September. Hackney House welcomed

over 40,000 business visitors, investors and gave a

showcase to local tech and creative talent. In March 2013,

we took twenty five local creative tech businesses to the

South by South West Festival (SXSW) in Austin Texas for our

new pop up business venue, Hackney House Austin. In September 2013, working

in partnership with local companies, we opened BL-NK on East Road, in the heart of

Tech City a 3,000 sq ft business showcase, digital arts and networking venue for

use by the local creative tech business sector (www.bl-nk.org).

In 2013 Hackney Council was awarded the Government department for Business

Innovation and Skills (BIS) prize for Encouraging Business to Export.

Through our newly re-launched business and investment website

www.investinhackney.org we host regular networking sessions and communicate

with businesses through our Hackney Business Network newsletter and we regularly

work with local companies to find staff and apprentices for them locally.

Our commitment to supporting Tech City and its local business base continues with

new initiatives, overseas business friendship agreements and developments to match

the creativity of the sector itself.

community case studies:

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Over the last three years, Government has worked directly with the Tech City community as well as representatives from technology clusters across the UK to understand the principle barriers to growth for technology and digitally enabled businesses. Feedback from business leaders in the tech ecosystem has come through a variety of channels.

PoLICIEs: dRIvING GRowTH

One regular channel through which policy makers have been able to capture

feedback and information has been through the Tech City Breakfast events,

which began in 2011. Held at Number 10 Downing Street, the breakfasts are

a regular gathering of technology entrepreneurs, start-ups, large corporates,

investors, support organisations and thought leaders. The breakfasts have

provided a forum through which policy makers can hear first hand from the

tech community about pertinent issues facing this rapidly evolving sector.

We attended a Tech City Breakfast at No. 10 at a time when we were

looking for office space for our start-ups and it needed to be as inexpensive

as possible. I got talking to the man sitting next to me, who turned out to be a

property developer in the Tech City area who wanted to build closer relationships

with start-ups. A week later we had a rent-free office in the heart of Tech City.

I cant see how that could have happened any other way.

Matt Clifford, CEO, Entrepreneur First

Being located in Tech City was the natural choice for us as we

work hand-in-hand with the community, in terms of sourcing instructors,

attracting students and providing apprenticeship placements.

Matt Cynamon, Regional Director, General Assembly

The principle challenges raised by entrepreneurs and business leaders within the technology sector can be broadly categorised as follows:

education, skills and talent

access to Finance

supporting growth businesses

opening up government procurement

rewarding innovation

inFrastructure

Government has listened to the challenges faced by young and

growing businesses and wherever possible, policies and programmes

have been put in place to help address these barriers. This section

highlights the policies which have been created in response to direct

feedback and consultation with the business community.

J

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education, SkillS and talent

Access to the right talent is often cited as one of the biggest challenges for businesses of all sizes. To help address this, Government in partnership with various partners, has introduced a series of measures to help address the skills shortage that many of todays technology businesses face.

Imagine the dramatic change which could be possible in just a few years

Instead of children bored out of their minds being taught how to use Word and

Excel by bored teachers, we could have 11-year-olds able to write simple 2D

computer animations using an MIT tool called Scratch. By 16, they could have an

understanding of formal logic previously covered only in university courses and be

writing their own apps for smartphones.

The Rt Hon Michael Gove MP, Secretary of State for Education

A Curriculum for the Digital AgeThis year, the Department of for Education announced a new world class curriculum.

For the first time, children will learn to programme computers. This will raise

standards across the board and allow for children to compete in the global race.

Support through the visa and immigration systemThe Government is committed to supporting the tech industry by attracting the very best global talent in the sector.

Entrepreneur Visa: introduced in April 2011, the Entrepreneur Visa encourages the best

entrepreneurs from outside the EU to set up and run their business in the UK. Successful

entrepreneurs are able to settle in the UK more quickly if they have created at least ten

full-time jobs or generated an income of at least 5 million.

Exceptional Talent Visa: Expanding on the Exceptional Talent route, by opening it up to

world-leading individuals in the digital technology sector. Tech City UK has agreed to become the

designated competent body for this route which we will open in April 2014. This will provide an

immigration route for individuals with a proven track record in developing successful businesses

or creating new innovations in the tech sector, allowing our technology industry to attract the best

global talent in the world. This builds on the package of measures UK Visas and Immigration

has introduced to support the tech sector and small and medium sized companies more widely.

UKVI has launched a targeted help-service for Tech Citys Future Fifty companies, to help guide

them through the immigration process when recruiting employees from outside Europe.

Home Office are also working with the Greater London Authority on a pilot to help SMEs

recruit international talent by providing a toolkit designed to meet their specific needs and a

dedicated helpline. The pilot is proving to be successful and if this continues the service will

be expanded outside London.

Global Entrepreneur Programme: aimed to attract high-calibre, early-stage companies and

entrepreneurs to set up their headquarters in the UK and globalise their businesses from a UK hub.

To develop Tech City as a world-leading tech cluster, its key to attract

the best global talent: entrepreneurs who can build their companies here.

If entrepreneurs choose to start-up and grow their company here, they are

creating jobs and driving growth in the UK economy.

Saul Klein, Partner, Index Ventures

Hiring the right people with the right talent remains a significant issue for

most technology firms today. This cant continue. How do we address this?

We can start to address the weaknesses in the education system at all levels

and we can work to create a place that draws the best people in because it is

somewhere they want to be. Tech City is quickly becoming this place. I would

argue that even more can be done to promote the area as the destination of

choice for tech talent.

Kathryn Parsons, CEO and Co-Founder, Decoded

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The Intel Collaborative Research for Sustainable Connected Cities

A partnership between Intel, Imperial College London and University College London.

Dedicated to exploring how technology can support and sustain the social and

economic development of cities worldwide, the research centre collaborates with

Tech City start-ups to identify and analyse emerging trends in the area.

The Barclays and Ravensbourne Partnership

A joint programme of student internships and business design challenges

on world-class design and digital focused projects that will contribute to the

economic growth of the creative industries.

IDEA London

Cisco, DC Thomson and UCL have joined forces, creating an innovation centre

in Shoreditch to support the growth of digital and media companies, in a unique

alliance between a world-leading research institution, a world-class information

technology provider and an international media company.

UCL and the Olympic Park

UCL will work with the London Legacy Development Corporation to create a new

cluster for higher education on the Olympic Park. The new UCL development will

be part of a transformation of East Londons business economy with a focus on

arts, culture, design and innovation. These ambitious plans fit with Londons status

as a dynamic, young, global city that leads in research, culture and business.

Indeed, it has more of the top universities in the world than any other city.

UCLs presence on the Park will become a powerful draw for a creative, forward

thinking business community, uniquely able to access the resources of the

world-class research community to help drive innovation, jobs and growth.

Samsung Electronics Partnership with Newham College

Samsung Electronics UK, a leader in digital media and convergence technologies,

has invested 500,000 in a new Digital Academy in East London. In partnership

with Newham College the new Digital Academy will help tackle youth unemployment

and bridge the technology skills gap that is emerging in digital electronics as new

technologies enter the market.

The Samsung Digital Academy is a state-of-the-art training centre, which

provides young people with the skills needed to pursue careers in the information

and creative economy. It features three new training classrooms for practical and

vocational training, offering students the latest in-class teaching facilities with

Samsung mobiles, tablets, all-in-one PCs, e-boards and wireless printers.

MIT - Regional Entrepreneurship Acceleration Program (REAP)

UKTI is working with MIT, RBS/NatWest, and a team of corporates, entrepreneurs

and academics to set up a blueprint for supporting innovation communities. This

work will drive entrepreneurship both in physical locations and as part of a virtual

experience for entrepreneurs looking to succeed.

working in PartnerShiP with higher education

Higher Education institutions have a critical role to play in nurturing talent as well as driving innovation. Government has worked with leading universities in London and across the UK to deliver a new breed of collaboration. These new initiatives will propel new technical skill, business knowledge and research capability into the technology ecosystem.

Todays best businesses understand they need many more

people with the highest quality technological education coupled with

entrepreneurial experience; just one or the other is insufficient.

Professor David Gann CBE, Vice President (Development & Innovation),

Imperial College

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Imperial College London and Tech CityImperial is plugged into the heart of Tech City. The Colleges Digital Economy Lab

is fostering connections between digital researchers and external organisations to

tackle the fundamental technical, social and commercial challenges

surrounding the digital economy. This includes the Digital City

Exchange programme, which enables researchers to harness next

generation digital systems to combine and repurpose city data.

These pioneers are exploring ways to digitally link city utilities and

services, creating new business and tech opportunities, which

could ultimately transform the way we use cities.

Huawei is planning to create a new data science lab at Imperial College London.

The Huawei-funded lab will operate within Imperials new Data Science Engineering

Institute. The Institute will cultivate multidisciplinary collaborations between the

Colleges academic experts and research partners to create the next generation

of big data technologies and businesses.

One of the top universities in the world, Imperial College London is expanding

the frontiers of knowledge in science, technology, medicine, and business, and

translating these discoveries into benefits for the capital.

Imperial nurtures a dynamic enterprise culture, in which staff and students join

Londons tech, medical and financial networks, and where collaborations with

industrial, healthcare and international partners are part of the fabric.

At Imperial West thousands of next generation thinkers will translate and

commercialise cutting-edge research for the benefit of our economy and society

as they develop exciting new products and services.

Imperial West is within easy reach of Imperials medical campus adjacent to

Hammersmith Hospital, and well connected via the Med City corridor to the

new Crick Institute at St Pancras among other R&D centres.

The mixed use 25 acre campus will stimulate new investment in research, yield

economic growth and play a leading role in the regeneration of White City.

The co-location of research, business and healthcare on this scale is unprecedented

anywhere in the world, reinforcing Londons position as a catalyst for scientific

development and economic growth.

Construction of the 150 million Research & Translation Hub the next major

development at Imperial West will finish in late 2015. It is funded by 35 million

from the UK government (HEFCE), 90 million from Voreda Capital and 25 million

from Imperial College London.

In the last five years we have seen the rapid expansion of the digital

cluster of businesses around us but had an increasing concern about skills

challenges for residents and employers. I was able to use networks such as

the Tech City Breakfasts at No 10 to talk about both the development of the

Hackney University Technology College (HUTC) and our idea to create a new

Tech City Apprenticeship programme. HUTC focuses on technical education

in digital technology and health. Its four-year programme is designed to

create the developer and tech entrepreneurs of by 2016 and the Tech City

Apprenticeship programme aims to create a faster, work-based learning

route into the tech industries.

Ian Ashman, Principal, Hackney Community College

Tech City Apprenticeships and Hackney Community College

This apprenticeship programme has been developed to meet the skills and

employment needs of the growing Tech City community. Its thought that up

to 500 apprentice places could be created by 2016.

28 29

For us, the Seed Enterprise Investment Scheme has had a

particularly important impact. By bringing new angel investors into the

market and incentivising investors to look at very early stage opportunities,

its made it much easier for the kind of start-ups that are emerging from

programmes like [Entrepreneur First] to receive funding.

Matt Clifford, CEO, Entrepreneur First

The Enterprise Investment Scheme (EIS), introduced in April 2011,

boosted upfront income tax relief for private investors from 20% to 30%.

This means that the amount that any individual can invest through EIS has

doubled from 500,000 to 1 million a year.

To address this structural shortage of early stage investment, government

also created the Seed Enterprise Investment Scheme (SEIS). Introduced in

April 2012, SEIS is the most generous early-stage tax break in the world,

providing 50% tax relief for the first 100,000 seed investment. The exemption

of the investment from capital gains tax has been extended for another year

to cover tax year 2013/14.

SEIS and EIS STATS: HM Revenue & Customs has reported a

dramatic rise in the number of small businesses applying for

approval under schemes designed to encourage investment.

In 2012/13, a total of 4,075 companies applied to raise

funds under the Enterprise Investment Scheme (EIS) and

Seed Enterprise Investment Scheme (SEIS), a 90% increase on

the 2,147 applications submitted in the previous year.

Funding For all StageS oF growth Young tech/digital companies need easy access to early stage finance to jump start growth. Through regular dialogue with these young and growing firms, a number of programmes and policies have been established to support them at various stages of their lifecycle.

The creation of SEIS as well as the extension of EIS have had tremendous

impact on early stage companies by helping them attract more investors and

investment amounts. The benefit of up to 50% income tax deduction for angel

investors means the actual out of pocket (net cash) from the investor is only

50% of the actual monies thereby providing fantastic leverage for benefiting

companies. This doesnt even take into account the CGT benefit for the

investor which adds to the appeal.

Because S/EIS requires purchase of common shares and not preference shares,

the scheme helps to level the playing field for early stage company founders

and does away with onerous terms or having to concern themselves with

over-bearing preference rights.

Eileen Burbidge, Partner, Passion Capital

30 31

Business Angel Co-Investment Fund:

the 50 million Business Angel Co-Investment

Fund supports Angel investments into high

growth potential early stage SMEs.

Enterprise Capital Funds: designed to

provide equity investment in early stage

companies with high growth potential but

unable to obtain finance. The Government

provides money for investment funds, but

limits the return taken, making private

investments more profitable in

successful funds.

UK Innovation Investment Fund: is a venture capital fund that aims to

drive economic growth and create highly skilled jobs, by investing in

innovative businesses where there are significant growth opportunities.

Enterprise Finance Guarantee: is a loan guarantee scheme designed

to facilitate additional lending to viable SMEs lacking the security or proven

track record for a commercial loan.

Business Finance Partnership: launched May 2013, its aim is to

increase lending to small and medium sized businesses from sources

other than banks.

Start-Up Loans: Funding the Next Generation

Launched in September 2012, the Start-up Loan Scheme provides

support to individuals to help them start their own business. The

pot received an additional 30million in January 2013, boosting

the total available for Start-Up loans to over 110 million over

the next three years

At publication, almost 51 million has been loaned to 10,000 Start-Ups.

The Business Bank

The business bank will manage the combined 3.9 billion of Government resources

in order to promote competition and increased supply through new finance

providers as well as increase the provision of finance to viable but underserved

businesses, in particular improving the provision of long term finance.

Entrepreneurs Relief was created to reduce the amount of Capital Gains on

disposal of qualifying business assets, allowing investors to realise more capital

on their investment in start-ups and small companies. It was doubled from

5 million to 10 million, giving business owners a special Capital Gains tax rate

of 10% on their first 10 million.

Share Loss Relief allows investors to offset any losses in shares against their

income, thereby reducing their taxable income.

Investor Visa: announced in November 2010, it aims to encourage

high-net-worth individuals who want to make a substantial venture investment

in start-ups and entrepreneurs to relocate to the UK.

Venture Capital Trusts: encourages

individuals to invest indirectly in a range

of small higher-risk trading companies

whose shares and securities are not

listed on a recognised stock exchange,

by investing through VCTs.

Corporation Tax: the Government

aims for the UK to become the most

competitive tax system in the G20.

Corporation Tax rate was lowered to

23% in April 2013 and will reduce further

to 21% by 2014 and 20% in 2015.

Tax relief for the creative sector:

introduced in April 2013, corporation

tax relief for the animation, high-end

television and videogames industries.

32 33

From Start-uPS to Scale-uPSHigh growth companies are one of the cornerstones of the economy. Barclays recent Entrepreneurs Index shows that the proportion of high-growth companies

in the UK mid-sized SMEs recording an increase in turnover of at least

33% over the past three years, as well as 10% year on year growth for a

minimum of two of these years has also shown an impressive increase,

from 17.4% in 2011 to 20.5% in 2012. This means that one in five of these

companies can now be defined as high-growth. Increasingly, Government

has introduced new and important measures to create the best environment

necessary to allow these firms to flourish.

J

Addressing the Funding Gap for High Growth Businesses

One of the challenges facing entrepreneurs and business builders as they

scale-up is the funding gap. The funding environment for early stage in the UK is

quite robust, yet todays digital and tech businesses scale up faster than traditional

industries and often need substantial growth capital at earlier stages. The market

opportunities for digital businesses are global and hard to quantify. Without the

track record of revenues and profitability required to secure later stage investors

or to access the public markets, these firms often turn to US funding sources and

once they secure funding from America, the centre of gravity for the company shifts,

making the US the logical choice for raising capital in the future.

Figures from the BVCA suggest that nearly 700 million was invested in start-ups

and early-stage companies in the UK between 2010 and 2012, and there is

every indication that the annual rate of investment in early stage companies has

increased in 2013. Government has actively supported this through the EIS and

Seed EIS schemes which have attracted large numbers of private investors to this

space, and new innovations such as crowdfunding platforms are further examples

of innovation and increasing the supply of start up risk capital. Yet in the same

period only 329 million was made available to more established companies so

called late-stage venture who require larger sums of capital to enable them to

continue growing and to reach profitability and a sustainable future.

We can make a very strong

argument that we are just as good as

Silicon Valley at funding early-stage

companies. Since 2005 nearly 1,200

equity investments have been announced

in early-stage British companies, around

220 every year. In the same time period

it is estimated that around 1,400

investments were made in Silicon Valley.

However, in those same years whilst

over 1,500 more mature Silicon Valley

companies received larger, later-stage

funding, fewer than 400 similar sized

UK companies got the funding they need to continue to grow. That suggests

there is in the region of four times more late-stage funding activity in

Silicon Valley. This has to change.

Stephen Welton, CEO, Business Growth Fund

The limited supply of this late stage venture capital means that we are not able to fund all the

quality opportunities coming through, meaning that some of the very best new companies are

not able to fulfil their potential or leave our shores to fInd other sources of funding.

With this in mind, the Government has asked the Business Growth Fund (BGF) to bring

together a group of like-minded funders, including banks, to look at structural and sustainable

solutions to the current funding gap. We need to ensure that the escalator from start up

funding through to public markets is working effectively at all stages.

In the two years since they made their first investment, BGF has become the UKs most active

growth capital investor it has already provided 200 million to nearly 40 companies, including

two companies here in Tech City: Unruly Media (a social video distributor) and Workshare

(a provider of cloud-based document collaboration software). The growth capital and

support that BGF provides is the next step after venture capital. Their focus is primarily

profitable companies with a turnover of 5 million to 100 million.

BGF with their capital base and existing regional infrastructure, are keen to become more

directly involved with the financing needs of fast-growing companies and consider how they

might work with others to provide additional firepower within the current funding environment.

This is an essential part of the overall ecosystem that in turn will flow through to public markets.

34 35

Enhancing the opportunity for High Growth Businesses

Over the last 2 years, changes have been introduced to improve the competitiveness

of UK capital markets. The Government has removed Stamp Duty on AIM shares and

allowed ISAs to be invested in the AIM market companies. The Government has also

worked with the London Stock Exchange to create new offerings uniquely suited to the

capital requirements of high growth digital and tech companies. The new High Growth

Segment offers a reduction in the free float requirement from 25% to 10%. This is

important for entrepreneurs who want to raise long term capital but maintain

management control over their businesses and aligns with equity requirements on

Nasdaq and NYSE.

Looking forward, the Association of British Insurers (ABI ) is leading discussions with

investors, investment banks, lawyers and the Financial Conduct Authority (FCA) to

further improve the competitiveness and efficiency of the UK as a listing destination

while reassuring retail and institutional investors of appropriate compliance and rigour.

Areas of discussion have included: earlier publication of the prospectus, increased

availability of independent research and reduction of the research blackout period

which could ultimately lead to improving investor education and the shortening of

IPO timeframe. The government continues to encourage this dialogue to increase

the competitiveness of UK exchanges.

FTSEs UK Digital Services IndexLaunched on 6 December 2013, the Digital Service Index will benchmark UK

companies both large and small operating in the digital sector.

The launch of the index series reflects the growing importance of the digital sector

to UK businesses. It comprises not just software and technology stocks, but provides

a true picture of the great breadth of industries in the UK that the internet has

revolutionised. A company is eligible for the index if it derives over half of its revenues

from either digital or online services, or if it is considered to be engaged in providing

services that are integral and critical for the functioning of digital services.

The High Growth Segment (HGS) is a new segment of London Stock Exchanges Main Market, designed to assist mid-sized European and UK companies that require access to capital and a public platform to continue their growth.What type of company can access HGS?Specific eligibility criteria include: Incorporation in an EEA state; Equity shares only; Revenue generating business with historic revenue growth of 20% (CAGR)

over a 3 year period; Minimum free float of 10% with a value of at least 30 million (majority

of the 30 million must be raised at admission); A Key Adviser (who must be a UKLA approved Sponsor) to be retained

at admission and for specific matters including notifiable transactions.

in FocuS: high growth Segment

Ensuring that the UKs fastest growing and most dynamic companies

have access to equity capital is a priority for London Stock Exchange. The

High Growth Segment provides an additional attractive choice, giving these

companies a launch pad for further success and facilitate their transition

from private to public company life.

Alexander Justham, CEO, London Stock Exchange plc

Like so many of the start-ups it plays host to, Tech Citys success can

be measured in the challenges it has created for itself; the challenges faced by

start-ups evolve and change as the business rapidly scales up. Three years

ago, the debate surrounded whether there was indeed a technology cluster in

East London. Such debates appear rather quaint today as businesses and

policymakers attempt to resolve challenges surrounding the acquisition of

resources such as highly trained talent and growth capital, and the very top

cohort of firms grapple with the merits of an IPO in London or New York. It is

abundantly clear, therefore, that government policies in support of Tech City,

combined with incentives for seed funding have helped to unleash the dynamic

potential of Londons tech industry.

However there is much work to be done. The tech industry is hungry for talent,

and whilst government policies on education will help to close the talent gap in

the medium term, and efforts by business and government aim to shift cultural

perceptions in the long term, policies on immigration risk strangling a surging

industry in the short term.

Tim Hames, Director General, British Venture Capital Association

36 37

London is one of the most exciting and energetic places in the world to

build a company, specifically in the fashion technology space where we lead

in innovation. The Future Fifty is simply an invaluable support network that

understands these challenges. All the great effort that Tech City UK has put

in to make those practical and tricky conditions as easy as possible means

our team can get on with building a world-class product and company.

Chris Morton, Co-Founder and CEO, LYST

A Future Fifty Company

The Future Fifty is a high growth acceleration programme to help

the most promising businesses reach their full potential.

Announced by TechCity UK in April 2013 with the support of the Chancellor of

the Exchequer, Future Fifty builds on reforms introduced by the London Stock

Exchange and the Government to further cement the UKs position as the

worlds best destination for high-growth businesses.

An independent Advisory Panel working on behalf of by TechCity UK

selected fifty exciting and innovative high-growth companies into the

programme between October and December 2013:

ACHICA, Acturis, ao.com, Box, Calastone, Chemist Direct, Datasift,

eCommera, eToro, Farfetch, Funding Circle, Global Personals, graze, Green

Man Gaming, Hailo, Horizon Discovery, HouseTrip, Huddle, Just-Eat,

Lumimobile, Lyst, MADE.com, Masternaut, MATCHESFASHIon.CoM,

MedicAnimal, Mimecast, Mind Candy, MoDE, Moo.CoM, Myoptique,

naked Wines, neomobile, nomad Digital, notonTheHighStreet,

omnifone, oneFineStay, Photobox, Repknight, Secret Escapes,

SecretSales, Shazam, Skimlinks, Skyscanner, Small World Financial

Services, Swiftkey, Synthesio, Unruly, Worldstores, Zoopla, Zopa.

Now part of the Future Fifty programme, these companies have access to a

broad range of support and services, accessible via a single point of contact

within the Future Fifty team. This concierge-style support includes: strategic

advisory, educational workshops delivered by partners from the private sector,

bespoke events focused on increasing engagement with institutional investors

as well as a continuous programme of press and promotional backing of the

cohort. All the content accessible through the programme is built around needs

identified in consultation with each company.

These fifty companies are already driving economic growth and creating jobs

across a range of sectors. With this tremendous package of support from the

public and private sector built around their individual needs, the programme

aims to help them continue to scale rapidly and lay the foundations for their

next major liquidity event.

the Future FiFty

38 39

In order to deliver excellent digital public services we need innovation,

rapid reaction and a can-do attitude from our suppliers exactly what small

British companies excel at. Were using innovative devices like the dynamic

G-Cloud and the Digital Services Frameworks to reduce the barriers to entry

for government procurement. We want to engage with the best companies in

a truly open market. And were getting there; were doing more than 50% of

new business with SMEs. So if youve always thought selling to government

was too bureaucratic, think again. Were open for business.

Liam Maxwell, Chief Technology Officer, HM Government

Initiatives like G-Cloud are having a big impact in giving innovative

SMEs with disruptive digital technologies the chance to showcase their work

and enter procurement processes alongside big incumbent players. Here at

BookingBug were certainly seeing the channels to delivering sizable

government projects open up and are in discussions with several different

departments about various projects. Thats something that seemed almost

impossible just a couple of years ago.

Glenn Shoosmith,CEO, Booking Bug

The launch of the G-Cloud service is one such example of how government procurement has been made more accessible to businesses of all sizes. Since the G-Clouds CloudStore was launched in February 2012, sales have exceeded 50million and 58% of these sales have gone to SMEs.

oPening uP government ProcurementWith over 230 billion per year spent on goods and services across the public sector, Government has been working to ensure that UK SMEs can compete for and win new business, ensuring it can support growing firms. Government has set a target to ensure that that 25% of its spend, either directly or in supply chains, goes to SMEs by 2015.

40 41

R&D Tax Credits are hugely valuable to start-ups like AMEE,

providing valuable cash flow, and giving both an incentive and

confidence to invest in innovation.

Gavin Starks, Founder, AMEE

In April 2012, the rate of Research and Development (R&D) Tax Credit

for companies with fewer than 500 employees increased to 225%.

This means that companies carrying out research or development

work in technology are entitled to tax credits, paid as a cash sum.

Many small firms have been benefitting from these tax credits and

using them to increase cash flow and to hire new staff which

contributes to the innovation cycle.

Between tax years 2008-2009 and 2011-2012, HMRC has seen a 49% increase in the uptake of

R&D tax credit claims.

The Patent Box came into effect in April 2013, reducing Tax to 10% on the earnings from intellectual property developed in the UK. This preserves capital for reinvestment and growth for start-up tech companies.

rewarding innovation Over the last three years, the Government has supported innovation, research and development through changes to the intellectual property framework and directly or indirectly funding innovative new products.

To explore how the intellectual property framework could support economic

growth and innovation, the Prime Minister commissioned the Hargreaves

Review in 2010. The review made 10 key recommendations and the

government has accepted each of them. In doing so, the UK economy

is expected to experience potential growth of up to 7.9 billion.

The UK Governments endorsement of the recommendations made by

the Hargreaves Report represents a positive step in reducing the uncertainty

around copyright issues for digital start-ups like Mendeley. It is crucial to ensure

that copyright law reflects the needs of researchers and academics so that they

can get the most from materials which they have legal access to, and share the

benefits of that knowledge with the wider society and economy.

Dr. Victor Henning, CEO, Mendeley

R&D Tax Credits

42 43

Open Data: In October 2013, Government published a report entitled Seizing the

Data Opportunity where it highlighted the potential impacts of big data on the economy.

The UKs open data infrastructure is world-leading with over 10,000 public data sets

published on data.gov.uk. Government also part funded the Open Data Institute which

leads the world in its thought leadership and business incubation practices.

I have been amazed at the energy and enthusiasm of people looking to align around

a global network of ODIs. The speed at which we have been able to collaborate, and the

shared thinking about the approach and the scale of the potential, indicate that the ODI is

an idea whose time has come. We have borrowed from the design principles of the web

itself to bring people and organisations together, and will use open data both to collaborate

with each other, and as the primary output of the network.

Gavin Starks, CEO, The Open Data Institute

The Open Data Institute the first organisation of its kind grew out of our belief in

the power of open data to foster innovation, drive economic growth and create prosperity.

The fact that only one year on, cities and countries around the world want to adopt the

ODI model, is evidence of how quickly the open data revolution is spreading. The

establishment of ODI Nodes in UK cities will help embed an open data culture in

communities, and bring the economic benefits of new and innovative data-led

businesses that will help the UK compete in the global race.

Francis Maude, Minister for the Cabinet Office

The Open Data InstituteThe Open Data Institute, based in the heart of Tech City, is the first of its kind in the

world. Founded by Sir Tim Berners-Lee and Professor Nigel Shadbolt, the ODI is an

independent, non-profit, non-partisan, limited by guarantee company.

The ODI has secured 10 million over five years from the UK Government

(via the UK innovation agency, the Technology Strategy Board), and $750,000

from Omidyar Network, and is working towards long-term sustainability through

match funding and direct revenue.

After the phenomenal success of its first year, the ODI announced the creation of

13 ODI Nodes around the world. The Nodes bring together companies, universities

and NGOs that support open data projects and communities.

THE TECHNOLOGY STRATEGY BOARD AND TECH CITYThe Technology Strategy Board the UKs innovation agency pioneered the

Launchpad concept in Tech City in 2011 because it was seen as a credible

cluster to test out the new idea. The Launchpad aimed to help develop and

strengthen a cluster of high-tech SMEs: in Tech Citys case, digital businesses.

Small, young businesses were invited to pitch for 100,000 of investment

funding. This could only be accessed if they were able to attract match funding

through other sources of finance. Given the number and quality of the proposals,

the Technology Strategy Board doubled the overall funding for the competition

from 1 million to 2 million.

Our selection process was designed to be easy and compelling: all applicants

were asked to submit a two-minute video, then those short-listed were asked

for a business plan. Sixteen businesses were offered funding and given 12

months to find the additional funding necessary to access the grant. In the

end, 13 of the projects went forward, including companies that now reach out

to international markets. The clothing app Snap Fashion takes smart phone

users from the pages of a fashion magazine to the high street in just one click;

the revolutionary keyboard designs of ROLI have

been adopted by leading composers and musicians worldwide, while the

artisan furniture business of UntoThisLast has developed user-friendly

software for the local economy.

The Technology Strategy Board uses a range of programmes and tools to

encourage innovation and economic growth across the UK. The Launchpad

concept has proved an extremely effective way to support SMEs and build

technology-focussed networks in specific locations.

This year alone, the Technology Strategy Board has allocated 5 million to

clusters in: manufacturing (Daresbury), satellite applications (Harwell), digital

technologies (Glasgow), motorsports (South Midlands), creative and digital

(Manchester) and cyber security (Severn Valley). Other locations (and technologies)

are currently under consideration as the programme moves forward.

Successful projects from the Tech City Launchpad:

UntoThisLast, Brightsouk, Rimota, Snap Fashion, FrameBlast, Seaboard,

Somethinelse, Padify, Unit9, Funding options, Makielab, Artistic.ly,

Passwords Made Simple.

44 45

a FlagShiP PartnerShiP: ee and tech city ukEE is the UKs largest communications company and the pioneers of 4G in Britain. The

company formally began its relationship with Tech City UK in May 2013. The two organisations

developed a shared ambition and vision, namely to use technology and innovation to help

make Tech City the worlds largest and most successful centre for start-up businesses.

To do that, EE is building out the worlds most advanced mobile communications infrastructure

across the area including the worlds first and only 300Mbps 4G service.

In the six months that the two organisations have been working together, EE has already

invested over 3.5m in improving the mobile infrastructure in the area. It means that

businesses in East London can now get faster mobile internet speeds, enabling them

to do more, deliver more, create more and connect more.

EE is also supporting major business initiatives in the area such as Boxpark, the independent

pop-up retail space, with the company supplying superfast 4G to all of the 20 retail units in

2014, enabling a cashless and technology-focused experience that heralds the future of retail.

EE has committed to prioritising Tech City for all future networking innovations, meaning that

businesses in the area will be able to stay one-step ahead of their global rivals.

As well as delivering a bigger, better, faster mobile infrastructure in the region, EE is

also supporting businesses with bespoke Tech City offers and mentoring.

The company has developed tailored Tech City packages for local businesses, giving

companies more airtime, data access and devices at the best value. Tech City companies get

privileged access to these packages, giving them the best possible start for their business.

EE has also developed a mentoring scheme EE Experts - which gives Tech Citys small

businesses and start-ups exclusive access to the some of the smartest minds in the telecoms

industry. The programme matches up experts from EEs legal, marketing, finance, technology

and HR departments, with small Tech City-based businesses that need support or advice

within that specific discipline.

In 2014, EE is also planning to build the EE Space a co-working environment that will

enable small businesses to work, network, learn and thrive with like-minded individuals.

The company is also planning to begin a privileged Tech City developer programme,

opening up its APIs to encourage the faster, more dynamic creation of next generation

mobile services for 4G and beyond.

EE is also looking to expand its Tech City partnership to Tech clusters nationwide, giving

small businesses and start ups across the country the opportunity to dream, develop and

deliver in bigger and better ways than ever before.

case study:

inFraStructure: communicationS and trainSGovernment Investment in 4GDelivering 4G services is a key part of the Governments commitment to

providing the UK with the digital infrastructure businesses need to succeed

and grow. The Government is investing 830 million to provide the UK with

the best superfast broadband network in Europe by 2015 as well as

extending mobile coverage.

BroadbandSuper Connected Cities: In 2011, the government set aside 100 million for

an Urban Broadband Fund (UBF) that will create up to ten super-connected

cities across the UK. This was followed in 2012 by a further fund of

50 million for a second wave of cities to benefit from this programme.

The super-connected cities will benefit from faster and better broadband,

and large areas of public wireless internet (wifi) access.

46 47

looking to the Future-connecting knowledge clusters The triangle of London Cambridge Oxford is the UKs kernel of cutting edge,

high-tech industry developments. Government is determined to support this

ongoing focus of economic development within the UK economy.

Beyond these central clusters, we are also enhancing and expanding connections

to other high tech hubs across the UK, as well as a range of international

gateways. This plan articulates the Governments commitment to a national

tech community, linked by a modern and growing rail network.

Stations play a key role as gateways to the rail network. Major redevelopment of

Farringdon, Reading and Birmingham New Street stations is nearing completion.

Proposals for the full-scale redevelopment of Oxford station are progressing

rapidly, so too are plans for a new station at Cambridges Science Park.

Farringdon will become a major transport interchange, served by Thameslink,

Crossrail and London Underground. It will enjoy fast and frequent connections

to Heathrow, Gatwick and Luton airports, as well as Brighton, Cambridge,

Stratford and Canary Wharf. As well as a rapidly developing tech destination in its

own right, Stratford is an expanding transport hub, with connections to tube lines,

High Speed 1 and Crossrail. As soon as 2017, we aim to deliver new infrastructure

which will facilitate the introduction of direct connections with Cambridge and the

proposed Science Park station.

A partnership has also been agreed between Central Working and Brookgate to

develop a members lounge and co-working space on Station Road, Cambridge

further cementing the relationship between the tech clusters in Cambridge and

London. Central Working runs a well established co-working space in Tech City.

o2 02, the fastest growing wifi operator

in the UK has 3,000 cell sites

covering over 7m people in London.

02 also has over 1800 wifi hotspots

across the capital with over

2.83 million registered users.

BTIn the period since Tech City project was announced, BT Group has been

deploying fibre broadband across the UK. The technology is now available at

over 2.6 million premises in London, and will reach over 3.1 million premises

by next Spring. Our research shows this investment should help create

26,000 new jobs and result in 6,600 new start-ups

The new BT Infinity Lab in Tech City is helping start-ups to develop

new applications and services that exploit fibre broadband. Were also

demonstrating G.Fast technology, which can potentially deliver speeds

of up to 1 Gigabit, at the Infinity Lab to help developers allow for future

advances too. And BT Sport, arguably the largest start-up in Tech City, has

the UKs biggest and most technologically advanced TV studio, broadcasting

since August 2013 from its new HQ in the emerging cluster in iCity on the

Queen Elizabeth Olympic Park in Hackney. BT Sport is the first tenant of

iCity and had created 300 new jobs on the site so far.

48 49

In three short years, Londons technology sector has experienced tremendous growth. Co-working spaces and accelerators have appeared all across the Capital, thousands of start-ups have formed, tens of thousands of jobs have been created, a dense ecosystem of startups and entrepreneurs has emerged and the overall economic impact has been felt across the city and across other sectors.

LoNdoNs Co-woRkING sPACEs ANd ACCELERAToRs

When I visited London in September 2012, it was very clear that something

had changed in the last couple of years. It just felt different. Better. Places like

Campus were teeming with start-ups that were thinking big. Big companies were

starting to help the little companies.

The Governments support had helped attract more talent and provided

visibility to what was happening in London.

David Cohen, Founder and CEO, TechStars &

Jon Bradford, Managing Director, TechStars London

Today London boasts over 30 co-working and accelerator spaces.

50 51

Google Campus Google Campus came about after David Cameron met

Eric Schmidt and encouraged him to invest in Tech City.

It was opened by George Osborne in April 2012. In the last 12 months, Campus has helped create 576

jobs among the start-ups in its first year.

Campus has helped start-ups raise over 34M (in the 12 months to October 2013).

Campus is also helping the UK to attract foreign investment with 100,000 visitors and 21,000 members

from over 60 different countries in 2013.

Over 1,100 start-up/entrepreneurship events have been hosted at Campus in 2013. This conservatively means that 100,000 people came through the doors

of Campus in 2013.

A recent report by the Kauffman foundation shows that entrepreneurship is contagious and that people are more likely to become entrepreneurs if they

know an entrepreneur.

This means that Campus will have a huge network effect beyond the walls of this building.

Mentorship In 2013 Campus will complete 1,000 mentorship sessions between entrepreneurs and Google employees this is the largest corporate

effort provide mentorship to startups in London.

Diversity A programme called Campus for Mums was launched to help mothers in maternity leave launch their startups by providing mentorship and

support over an 8 week program. The feedback has been fantastic and two

businesses have already launched closing the gender gap is hugely important

and Campus is already showing much higher participation of women than the

industry average for tech.

Inspirational speakers and role models have come to Campus. These events have given entrepreneurs a chance to engage with thought leaders such as

Eric Schmidt, Guy Kawasaki, Jimmy Wales, and many more.

The Barclays AcceleratorThe Barclays Accelerator, run by Techstars, is a multi-year, intensive start-up

programme designed to support new businesses on their journey to delivering

breakthrough innovations, the first of its kind in the financial services sector. Initially

companies will need to pitch their ideas that will really make banking better for

consumers, before a shortlist of ten is selected for a place on the prestigious

accelerator programme. The ten companies will be mentored by executives

from Barclays, including Darryl West, Barclays CTO and Derek White, Barclays

Chief Design Officer, alongside mentors from Techstars, including Jon Bradford,

Managing Director of Techstars in London and David Cohen, founder and

CEO of Techstars.

Each company accepted into the Barclays Accelerator will

receive a 12,500 ($20,000 USD) investment from Techstars

and a 62,500 ($100,000 USD) convertible note. The ten

companies will go through the Techstars process of

mentorship, company build-out and business model

refinement, culminating in an investor Demo Day in London.

white Bear YardWhite Bear Yard was the first tech start-up coworking space

in East London (Tech City) established in July 2009. Started on one floor with 2,000

sq ft and teams were RjDj and WeDo, then expanded in October 2009 to another

floor adding a further 5,000 sq ft and teams Smarkets, Timetric, Picklive, etc.

Mendeley moved into a third/further floor in December of that year.

A number of successful acquisitions/exits have come out of White Beard Yard

including, Timetric acquired by Progressive Media (2011), Rapportive acquired by

LinkedIn (2012), Mendeley acquired by Reed Elsevier (April 2013) and mopub

acquired by Twitter (September 2013).

In addition, notable US companies establishing EMEA HQ at White Beard Yard

include, Twilio ($104 million raised from VCs to date), General Assembly

($14 million raised from VCs to date), Stripe ($40 million raised from VCs to date),

RolePoint (fundraising not publicly disclosed), BuzzFeed ($46 million raised from

VCs to date).

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TechHubTechHub represents over 1000 members who have collectively raised over

100 million. Companies based at TechHub range from single founders to

30-person start-ups. The community created around these businesses

has meant that larger teams are now proactively mentoring younger companies.

TechHub now has two sites in Londons Shoreditch, one at TechHub @ Campus,

in partnership with Google, and one for larger teams, and are set to open in the

Olympic Park in 2014 as a major partner in iCITY as well as enjoying a large R&D

partnership with BT. TechHub has also opened in Riga, Manchester, Bucharest

and Swansea with Bangalore and other as-yet unannounced cities to follow next

year, taking TechHub beyond Europe. Its this move towards globally connecting,

not just start-ups, but the tech start-up ecosystem thats important for the growth

of the industry as a whole.

The Trampery2013 has been a year of rapid expansion for The Trampery with two new buildings

opening, an 800% increase in total floor area and The Tramperys community-

based incubator model brought to completely new sectors. The Trampery London

Fields opened in July as Londons first incubator for growth-stage fashion labels.

The 20,000 square foot building has been refurbished with The Tramperys

acclaimed style to provide light-filled studios which are now home to some of Londons

fastest-growing labels including Holly Fulton, James Long and Lou Dalton. The

buildings 2,000 square foot Morley Hall provides East Londons most spectacular

venue with its coffered oak ceiling dating from 1880. The project, developed in

partnership with the London College of Fashion and Hackney Community College,

was officially opened by HRH the Duke of York, Patron of The Trampery.

Meanwhile Mother at The Trampery is a 7,000 square foot warehouse on St John

Street, Clerkenwell, which opened in May as a partnership with communications

agency Mother. Its mission is to foster a community combining talented innovation

businesses from disparate sectors alongside senior figures from large corporations

including Unilever, Diageo, Microsoft and Coca Cola. In August The Trampery also

produced Hack the Barbican, a month-long partnership with the Barbican Centre

which brought together more than 100 projects at the intersection of arts,

technology and entrepreneurship.

Tech London AdvocatesTech London Advocates was launched in April 2013 and founded by former VP of

Skype, angel investor and member of Tech City Advisory Group, Russ Shaw. It is

a a private sector led coalition of expert senior leaders from the tech sector and

broader community who have committed to championing Londons potential

as a world-class hub for tech and digital businesses and to support its start-ups

in finding new investment, new talent and achieving high-growth.

Tech London Advocates has gathered more than four hundred senior leaders

who have agreed to come together to help promote London as a technology hub.

With an emphasis on the symbiotic relationship between big business and small,

Tech London Advocates has formed a number of Working Groups which are

working to address a variety of the challenges which the tech sector is facing.

These particular focuses include: Women in Tech; Talent and Immigration;

Education; and Capital and Investment.

warner YardFounded in 2013 by Playfair Capital, Warner Yard houses an exciting mix of start-ups,

investors and innovators. The Clerkenwell space has been designed to create an

environment where young companies can execute and grow. Warner Yard residents

include: a series of investors and start-ups such as Duedil, Planvine, RummbleLabs

and Taskfirm. Warner Yard was also the first London home for Tech Stars.

seedcampLondon-based Seedcamp is the most connected international seed investor in

the world and is Europes leading micro-seed investment and mentoring program.

Since launching in 2007, Seedcamp has received over 9,000 applications from

70 countries. With a wide network of mentors, Seedcamp has held over 13,000

mentoring sessions for the benefit of over 900 startups.

Seedcamp has ultimately invested in over 100 of Europes most promising

startups. Attracting over 360 investors into these startups, 83% of Seedcamp

portfolio companies have gone on to raise funding, totaling over $130million.

Seedcamp portfolio companies have created over 850 jobs in the process.

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An Alliance for the Future

Its vital that government stays in step with the pace of innovation and digital disruption

and continues to listen to the challenges faced by young and growing businesses

not just in Tech City but all across the UK.

In April 2013, Tech City UK reached out to established and emerging tech clusters across

the UK and formed the UK Tech and Business Cluster Alliance. The alliance represents

13 established and emerging technology clusters from across the UK with the aim to:

share knowledge and best practices; communicate opportunities and information that

will benefit the technology businesses within each cluster; gather input and feedback

from each business community and feed this into government.

TECH CITYTHE fuTuRE:Tech City has become Europes digital capital a global centre that demonstrates whats possible when passion, people and policy come together to support a common goal. And this is only the beginning.

Collectively, this group has identified five principal areas as the focus of its

work going forward into 2014. These include:

Enhancing and celebrating the culture around technology and entrepreneurship; Nurturing the skills relevant to the digital economy; Supporting high growth businesses by creating the right environment; Commercialising research and great ideas; Retaining IP and jobs within the UK.

Tech City UK and the UK Tech and Business Alliance was delighted to contribute to the

Governments Information Economy Strategy launched in June 2013. We will continue to

share insight and opportunities with the Information Economy Council as we collectively

work together to address challenges, remove barriers and catalyse growth in the sector.

In looking to the future, Tech City UK will continue to take cues and guidance from

the entrepreneurs and innovators. This has been at the heart of what has made

Tech City what it is today. We will carry on working with the Tech City community and

our partners and stakeholders to promote the UK as the best place to imagine, start

and grow a technology business. We will also continue to champion innovation and

entrepreneurship as well as increase our focus on creating the best environment for

companies to scale and grow through programmes like the Future Fifty and the

Cluster Alliance. By continuing to have this dialogue, we can ensure a bright future

with possibilities that are limited only by our imagination.

I hope that people see whats happening here and understand that

you can have an impact on culture, create your own jobs, create your own

businesses. We should be inspiring and enabling people to do that, students

especially. [Tech City] is where they can come. We can support that, we have

a community here now that can support that.

Matt Webb,Founder and CEO, BERG

Technology clusters are emerging throughout the country and many

of the challenges we face are common to us all, such as access to skills,

capital, public and private sector markets. The Cluster Alliance is helping

us to learn from each other and find common solutions.

Edward Benthall,Chair, Cambridge Enterprise

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APPENdIx

58 59

ABouT ouR dATA PARTNER

Employment data in this report was provided by CareerBuilder in conjunction

with Economic Modeling Specialists Intl. (EMSI), a CareerBuilder company

specializing in labor market analysis. As the global leader in human capital

solutions, CareerBuilder works with the worlds top employers, providing

everything from labor market intelligence to talent management software

and other recruitment solutions. Owned by Gannett Co., Inc. (NYSE:GCI),

Tribune Company and The McClatchy Company (NYSE:MNI), CareerBuilder

and its subsidiaries operate in the United States, Europe, South America,

Canada and Asia. For more information, visit www.careerbuilder.co.uk

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EuRoPEAN INTERNET: uk LEAdING THE wAYBarclays new research on the European internet landscape demonstrates that the UK is a global leader in the digital economy.

Average user Hours online Per month

United Kingdom 37.3

Netherlands 30.6

Poland 29.3

Finland 27.8

France 27.3

Norway 24.6

Germany 24.6

Spain 23.8

Belgium 22.4