Britain's government has christened the area "Tech City" and makes no secret of its hope that the entrepreneurial ventures being dreamed up there can spearhead an economic boost to lift the country out of a long recession.
But its plan faces a major hurdle: the area touted as London's answer to Silicon Valley has not produced a single big-name UK-listed company. Many firms are failing to secure second-round funding while the cream of the crop are being snapped up by U.S. venture capitalists and top names like Yahoo, taking jobs and potential tax revenues with them.
Worried, the government has launched a string of policies to try to ensure that the best of British tech secures the funding and expertise it needs to grow inside the United Kingdom.
"We've lost a lot of our best and brightest businesses to the U.S.," says Joanna Shields, who held management positions at Facebook, Google and Bebo and now runs the government's Tech City Investment Organisation to encourage inward investment.
As part of the same push, Finance Minister George Osborne launched the "Future Fifty" project to share contacts and advice with companies looking to expand internationally. He has also cut capital gains tax for young businesses.
Prime Minister David Cameron is disappointed that Britain has not yet created a Google or an Amazon. "I want to try and make sure that the next wave, and there will be a next wave, some of those are born and bred right here in Britain," he said last month.
Securing seed money is relatively straightforward. Getting subsequent funding is where the real problems arise, says Simon Cook, chief executive of DFJ Esprit, an affiliate of California-based investor Draper Fisher Jurvetson. "In America, if you start a company and show some progress, you are probably going to get another round," said Cook. "In Europe, only one in five (companies) can raise any more money."
Source: Reuters
