“Silicon Roundabout” is an ode to our American cousins and the mighty Valley, symbolising the emergence of a tech community in London all but a decade ago. Projecting a cheering sense of British irony, the adopted nickname nods to the obvious differences of Old Street’s humble beginnings as an emerging collective of tech entrepreneurs in East London and San Francisco’s billion-dollar behemoths.
Taking a temperature check in 2020 – while differences in scale remain, London’s tech scene has defied much of the overall pessimism and stagnant confidence levels in the British economy and is proudly a remarkable success story on the global stage. Building on record sums of inward investment, exits and genuinely world-leading feats of innovation – there is much to commend. In the Capital, the tech sector is no longer reserved to Old Street and is increasingly diversifying geographically, and now stretches from Canary Wharf and Level39 to White City in Shepherd’s Bush.
London’s tech sector successes have been somewhat mirrored by steady growth across the UK in the digital space – with several other metropoles such as Manchester, Birmingham and Edinburgh becoming home to thriving tech companies and creating local employment opportunities.
This being said, there are glaring disparities where London is pulling away from the rest of the UK. In 2018, London was revealed to be 31.6 per cent more productive than the UK average with the South East being the only other region to register above the average. The latest report by social mobility charity, The Sutton Trust, found that London had become “off limits” for many young people from poorer backgrounds due to rising social barriers.
This disparity has not gone unnoticed by the new Government. Boris Johnson’s sloganised vision for “levelling-up” the UK looks to directly address economic shortfalls across the country through a £20bn-a-year shift in public spending on infrastructure that would see investment being made into less prosperous parts of Britain. Such proposals hope to raise the performance of these areas through investment in new transport projects and other large public works to eliminate regional imbalances.
Whilst there is great merit in a top-down drive, I would ask, what of the private sector? Neurologist Paul Goldsmith’s research on people’s sense of wellbeing, posits that we are generally aware of how well we’re doing relative to wealth and activity. Investment initiatives might be effective in addressing the first frame-point being wealth, but Dr Goldsmith equally argues that activity, namely the extent to which people feel they are participating in something, is the most important factor relating to one’s happiness.
Today, the Canary Wharf Group has launched a report at its new, 5m sq ft, district Wood Wharf – Future Proofing London’s Economy – which asks how the Capital can deliver for its entrepreneurs, businesses and environment within the critical areas of; social capital, new technologies, sustainability and the evolving business landscape. Amongst other contributors to the report, I recognise that the long-term prosperity of London’s economy is intrinsically linked to our ability to bring the rest of the UK on this growth journey.
In terms of what can be done in the tech sector to help improve the state of affairs – there is scope to assess nationwide involvement in London’s digital economy and to explore how we are distributing ownership. Direct ownership of equity in companies is at its lowest level since the Second World War, and with more than half of the UK’s population having seen no change to material wealth in a generation, it seems business is in danger of becoming an unreachable source of prosperity for many.
Already, a number of London’s companies are committing to sharing meaningful amounts of equity with those previously outside of the equation through initiatives such as GenieShares – giving others a stake in the future of the Capital’s economy. The GenieShares campaign, which I coordinate, is focused on equity sharing and citizen engagement – inspired by academic research and the activity of Level39’s entrepreneurs. It aims to promote entrepreneurship’s role in society at a time of rising economic inequality, wealth concentration and political turbulence.
GenieShares’ principles lay the foundation for a shift in public perception – and asks businesses to acknowledge the contribution they can make to society, while highlighting how wealth created by entrepreneurs is too often concentrated within a select group. Already Peter Kelly, CEO of Imployable, a tech-enabled recruitment platform, has gifted 1% equity to a randomly selected individual – who received a stake worth £30,000, and a stakeholder role in the company. Since then the company has enjoyed a surge in sales and the recipients life has also been transformed.
This movement can not only spread wealth, but also a sense of national purpose and belonging by bringing people in and demonstrating that the upward trajectory of the tech sector can benefit more – where even a relatively small level of ownership in a company can equate to a larger sense of economic agency.
Recognising the relationship between the growth of London tech in the long-term as dependent on the UK in its totality will be essential in future proofing its economy but also Britain’s more broadly. Direct ownership in the Capital’s thriving firms could well be an effective way of achieving this and “Levelling-up” the country.
Ben Brabyn is the head of Level39