Q: Is there a belief in business circles that success depends on being based in London?
A: There certainly used to be a belief that business success depended on basing yourself in the capital. In some ways, it’s easy to see why this myth took hold, given how many investment opportunities and prospective customers were based in and around the capital. However, in recent years the ‘London myth’ has started to fade and businesses have become far more savvy, recognising that there are plenty of opportunities throughout the UK. Startups were at the forefront of this, but today we’re seeing multi million-pound companies opening secondary offices outside London.
Q: Which other UK hubs would you say have grown to rival London and why?
A: Cities like Manchester, Cambridge and Bristol are welcoming a mixture of relocating and freshly-launched businesses, and I’d have to say a main factor in this is how these places have nurtured a strong entrepreneurial community. But with London becoming expensive places like Reading & Slough are now wonderful hubs to base your business. Anywhere that provides a supportive environment for growing businesses is likely to attract startups, and this brings a mixture of talent searching for employment opportunities, as well as investors chasing the next big thing. As a community grows, larger businesses begin to take notice - today we’re seeing big corporates looking to collaborate with growing companies more than ever, and they want to position teams alongside a buzzy, exciting community.
It’s also important to note that the opportunities aren’t just consigned to cities and entire regions like the Thames Valley have become hotspots for businesses. Microsoft chose to base its UK HQ in Reading, partly because the Thames Valley is one of the UK’s fastest growing tech clusters, but once you land a big fish it often becomes a self-sustaining process, with others following.
There are wider factors of course. Infrastructure investment outside London still has a long way to go, but there have been promising developments. Transport projects like HS2 mean that Birmingham and Manchester no longer seem quite so far away from the capital, and this means businesses in these cities can boast better links to London’s opportunities without needing to uproot themselves.
Q: What have been the main factors for the growth of regional tech hubs in recent years?
A: Access to finance and talent will always be the big draws for any business, and improvements to transport infrastructure has led to many of these places becoming far more connected and convenient to get to. I’d say the main driver for the growth of regional hubs has been that people simply want more out of their jobs and are willing to move to get it. Work life balance is a real deciding factor today, and while I still rate London as a fantastic place to do business, the city isn’t always recognised as a place where personal time is on parity with professional. Costs in the capital’s rental market for both residential and commercial property have spiralled, and there comes a point where people, whether they’re looking to start a business or move jobs, will look for more affordable options.
I also think that regional tech hubs have become far better at shouting about the good work they do. We were the first big London shared workspace to open in Manchester, so we’ve been able to see the tech community there thrive for a number of years. However, it’s only really in the last three years that national attention has been paid to the truly innovative work being done by Manchester’s tech community and other clusters outside London. This is in part down to organisations such as Tech Nation and Centre for Entrepreneurs, who make it their mission to highlight tech successes nationwide.
Q: Do you think we’ll see more startups and established businesses move out of London in the future?
A: I still believe London is a fantastic place to launch and operate a business, but it’s a fact that companies are constantly searching for better options and if they can’t find it in one place, they’ll look elsewhere. One of the reasons why Central Working recently launched clubs in Reading and Slough is that we know many London-based firms are considering relocating to the Thames Valley, owing to rising costs of living and transport in the capital. Companies are paying attention to the needs of their staff, founders are questioning why they’re boarding a 45 minute train journey to travel to an expensive office that could easily be located just down the road from them, and all the while they’re seeing other businesses and opportunities spring up in these new hotspots. London will always be a major hub for business in the UK and I doubt we’ll see a drastic exodus, but it’s a fact that the era of ‘London or Bust’ is over for many companies.
Q: What should startups and businesses consider when choosing their first location / another location?
A: Most companies look at costs first when considering a move, and this is understandable as office rent and upkeep play a major factor in budgets. However, I always recommend factoring in access to valuable business connections too, asking whether a location will provide you with a gateway to prospective clients, new hires or opportunities for investment. We often hear today that technology means you can work from anywhere, which is true to an extent. However, success in business often depends on the connections you make, and it’s a lot tougher to forge these connections over a Skype call. I’d look for regions that already have a strong business presence and an active community putting on networking events and best practice conferences. These are often the most effective ways to meet the people who will help drive your business forwards, so make the effort to ensure your prospective new home actually provides access to them.
Q: How do you think Brexit will impact the UK’s tech economy as a whole, and will it have a particular effect on regional tech?
A: Brexit’s impact on the the UK tech economy could prove to be massive, particularly when it comes to access to talent. The success of the UK’s fastest growing sector depends on maintaining a steady pipeline of skilled tech employees, whether they’re from this country or from overseas. I welcomed the government’s removal of a visa cap for skilled migrants, but it’s only really a start. Yes we’ll see an increased number of skilled workers, but they won’t just be for tech and it’s widely expected that most could be from the financial services industry.
The UK is Europe’s most successful tech hub, and it’s crucial we don’t lose that crown. The only way we’ll maintain our momentum is by ensuring we have enough skilled workers to service our growing number of digital companies, and tech deserves special consideration when it comes to how many skilled migrants we admit. This won’t just impact regional tech hubs, it’ll be a huge factor for the growth of London’s tech scene too.
Grant Powell, CEO, Central Working
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