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INSIDE HQ


This high-level backing is thanks in part to the unique opportunity Tech City has to benefi t from some powerful synergies. The recently extended East London Line and Stratford’s new international station, not to mention the area’s transformation ahead of the 2012 London Olympic and Paralympic Games – including substantial investment in ICT and infrastructure – herald an exciting new future for a once- deprived part of the capital.


EXPAND AND ATTRACT US fi rm Yammer, which sells social networking tools to businesses, is one of the companies attracted to the area. There were several compelling reasons for it to locate its European HQ in the UK, according to Georg Ell, Yammer’s general manager for Europe. “We believed London was the right European capital for us to open in,” he says. “East London was right for us specifi cally because of the Tech City initiative.” The area’s increasing concentration of talent was another key factor for the fi rm, which expects to grow from 48 to 150 staff by late 2012. “We felt it would give us a strong position when it came to hiring and that we could be part of an ecosystem bigger than us,” explains Ell. Support from UK Trade & Investment and London & Partners has been invaluable in enabling Yammer to grow as fast as it has in London. “They have assisted with everything from introductions and HR advice to helping with our search for premises,” states Ell. “This reduced the friction involved in fi nding those resources so we could get on with growing the business.” The championing and convening role played by senior Government ministers has also had a massive direct benefi t to Yammer in terms of profi le and publicity for both the fi rm and Tech City in general. There are strong arguments for the


Government to support the cluster in this way. The work of leading economic and management thinkers such as Professors Michael Porter and Richard Florida have


• Seedcamp, an early-stage mentoring and investment programme, with monthly hosted events across Europe


38 | springboard | www.ukti.gov.uk


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demonstrated the value of clusters to local and national economies. They are highly productive, attracting talented knowledge workers and investment, encourage spillover into other regions and promote innovation in other sectors. Clusters in ‘mega-regions’ like London and the South East will be the engines of future economic and employment growth, according to recent research by Florida. Ell has seen these virtuous circles at


work for himself in Silicon Valley’s feted technology cluster in the US. “When you see the movement of talent and funding into a geographical area, the fl ywheel starts spinning and you attract more talent and money,” he says. “We are seeing global businesses being built from London now. It also means you are able to incubate talent to stop it migrating abroad.” Tech City’s chances of replicating


Silicon Valley’s extraordinary success have been boosted by investment pledges of up to £500m from Cisco and the involvement of Google, whose Campus will speed the cluster’s growth.


GOING FOR GROWTH This concentration is already starting to pay off, says Richard Celm, CEO of the Accelerator incubator. “We’ve been operating for the last few years,” he states, “but it is only in the last 12 to 18 months that we have had the focus we are currently enjoying. You’re


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“ East London was right for us specifi cally because of the Tech City initiative”


more likely to get in front of the right people now.” In the long term too, Tech City looks


well positioned. Ongoing infrastructure investment is a factor. Crossrail should attract talent from the M4 technology corridor, and speed up international transfers from Heathrow. New space in East London, thanks to Olympics developments, provides room to grow. Meanwhile, a mature technology ‘ecosystem’ shows every sign of emerging. For every success like Last.fm and Moshi Monsters, there are several smaller but signifi cant winners. Some 70 companies have graduated from Accelerator to date, with six having already staged buy-outs of more than £1m, including TweetPhoto, which sold to a US buyer for £14m. Entrepreneurs such as Neil Duncan,


who sold his health-analytics business for a 20-times multiplier, are now on the lookout locally to invest in or launch their next businesses. Veterans of the City of London’s IT Livery Company, with experience and often money to invest, offer another mature network and source of potential funding. “There’s a great opportunity to connect people like that together now,” states Celm. Tech City’s diversity is another


GOOGLE CAMPUS’ FOUNDING PARTNERS


• TechHub, based on ‘Silicon Roundabout’, which offers affordable and accessible space for tech start-ups


promising sign of its world-class potential. High-growth consumer businesses, such as AirbnB, are complemented by highly scaleable business-to-business newcomers such as MarketInvoice. However, Celm still believes there is an ongoing role for government support for a while yet. “If we want Silicon Valley- levels of self-sustaining energy where the Government can step back because the VCs are fully engaged,” he says, “then we need to continue to stoke the engine for the next fi ve to 10 years.” ■


• Central Working, a members-based co-working club that aims to help 10,000 SMEs grow over the next 10 years


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