The number of new digital and technology companies in London has doubled in the last three years, according to a report due out tomorrow.
The study by Tech City UK will reveal that almost a third of employment growth in London is accounted for by the technology and digital sector, which now provides half a million jobs in the capital.
"Three years since the Prime Minister launched what began as a local initiative," said a spokesperson for Tech City UK. "Tech City has now become the nucleus of a new era of tech and digital growth which has seen clusters emerge and thrive all across London."
However, the sector has faced criticism for not employing people who live and work in the area around where many of the companies are based.
At the inaugural Elevator Pitch Awards last month, MP for Shoreditch Meg Hilier stressed the need for London-based startups to hire more local people.
Speaking to the London Evening Standard, Hilier said: "The government has been a bit star struck by the tech sector.
"They are amazing, but ministers also need to ask how much they are doing for the local supply chain and for employment in their area."
Many of London's new tech startups are based in Hilier's constituency in the east of London. While the government has helped the sector by granting tax breaks to new companies, according to Hilier more is needed to be done to help the local area.
"Many of these firms freely admit they don't employ local people at the moment, so the government needs to help them recruit in their area."