They may not be quaking in their boots just yet in the southern San Francisco Bay Area. But perhaps they should – because when it comes to innovation, the gap between the rest of the world and Silicon Valley is definitely narrowing.
KPMG’s Technology Industry Innovation Survey 2019 suggests that a seismic shift could be on the cards – almost 60 per cent of the 740 global tech leaders who responded believe that Silicon Valley will no longer be the innovation capital of the world by 2023.
And the good news for Britain is that London is seen as a key destination – equal to Tokyo and just behind New York and Beijing – with the UK as a whole coming third behind the US and China.
Reasons cited for a perceived shift away from Silicon Valley include the cost of living, questions about diversity and corporate culture, high business taxes and fears about increasingly close scrutiny of privacy and business data. Whether this reflects positively on the UK is open to question.
London has come a long way since the Old Street area was first dubbed "Silicon Roundabout". The capital’s tech sector was given a shot in the arm in 2011, when the Cameron government’s Seed Enterprise Investment Scheme produced a big uplift in early-stage investment. London’s progress was generally felt to have stalled under Theresa May’s leadership, however, although a factor could be the pause in foreign investment caused by Brexit uncertainty.
The capital is not the UK’s only tech hub. The closest such area to London is Reading and the Thames Valley, where the density of tech companies is seven times greater than the national average, according to government-backed agency Tech Nation, and the region is growing at around 2.5 per cent.
However, while its proximity and fast transit times to London may be a big factor in Reading’s success, it’s a double-edged sword, since residential property prices can also be affected by the location.
Further afield is the Cambridge-to-Norwich "tech corridor", which pools the know-how of the two university cities, while Birmingham, Manchester and Liverpool have been demonstrating growth in – and appetite for – tech companies, with the last two cities hoping to receive a further boost when the HS2 transport project reaches completion.
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