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Summary:

As Britain prepares to host the Olympics, London’s startup entrepreneurs are the focus of a string of major announcements that all promise to transform the city from a fading Victorian giant into a gleaming technopolis. It’s a revolution that can’t come soon enough.

olympicgold-shutterstock-davidfowler
photo: Shutterstock/David Fowler

Even on its quiet days, London is one of the world’s true international cities: a mad metropolis that bustles with energy, people and a frenzy of activity that connects it to the rest of the planet. And these are certainly not quiet days: On the eve of the Olympics, it’s busier than ever as citizens of all nations stream in and fill the city to bursting.

But it’s not just the games that have the British capital humming right now. Over the past week a string of announcements have underscored London’s reputation in technology and shown a glimpse of what the future could hold.

First we heard that Amazon plans to set up a new center for its global streaming media operations in town.Then came the announcement of a Facebook engineering office in the city, its first outside the U.S. And now we hear that Microsoft is expanding its presence in London too, with a powerful new Xbox studio being built.

This triple whammy of announcements has confirmed what was already apparent to those who have been watching closely: London is finally starting to exert its influence and become a serious player in the international technology scene.

This is not news to those on the inside, who know that London has been building up over the past few years. Google may have opened its new Campus startup hub in East London just a few months ago, but the search giant has had a hive-like office in the west of the city for several years. In fact, it’s where many of its important mobile services were developed. Microsoft, meanwhile, has built a strong gaming pedigree in the city by acquiring British studios like Lionhead as well as operating Borg-like corporate offices in the country for years (albeit from the dreary satellite town of Reading, 40 miles west).

The truth is, though, that this week’s announcements make an impressive combo.

No coincidence

It’s worth remembering that the timing here is orchestrated, at least in part. In fact, much of the news is a construction built and encouraged by the British government, which is desperate to put forward its best side as the world’s eyes zoom in on it. Google Chairman Eric Schmidt, who visited the city on Thursday, confirmed as much when he said Google’s investment in local startups was in large part down to “aggressive government support.”

Officials have contorted themselves in all sorts of ways to interest Silicon Valley’s finest. Google, for example, is one of a number of technology companies that can boast cozy relationships with the U.K. government, and Schmidt himself is an advisor to Prime Minister David Cameron.

Viewed from that perspective, perhaps this week’s announcements are little more than publicity — baubles intended to capture the attention of those looking at London for, perhaps, the first time in a long time. And there’s evidence to back that up. Facebook, for example, has actually had its London office for a long while: It merely chose to announce it officially just a few days before the Olympic opening ceremony.

But while I have long been skeptical of the government’s involvement in what it cringingly calls “tech city,” there’s no doubt that something very real is happening on the city’s streets.

London’s secret contribution to the global startup economy is being talked about a little more; new jobs are coming in from big international names; and a generation of blockbuster companies are being developed: Ambitious outfits like Wonga, Mind Candy and Huddle are all well on their way to becoming the billion-dollar businesses that Europe’s technology scene craves.

The government’s involvement in their success is really minimal. What is happening today is the fruit of work put in three, four, five years ago or more. But when combined with Downing Street’s unabashed eyelid-fluttering at multinational tech corps, what we’re seeing in front of us are the seeds being sown for another generation of really world-beating companies to emerge over the next few years.

A necessary change

For Britain as a whole, the revolution can’t come soon enough.

The country, full of shuttered stores and struggling with high unemployment levels, is desperately looking for a new lease on life. The wrecking ball that has smashed its way through the economy over the past few years has destroyed many of the politely ignored hypocrisies of British life: the self-interested politicians, the gangster press and a dominant, corrupt, venal banking sector that has spent years milking and twisting the system to its own benefit. All of these are blown open now, and nobody is happy.

London riots, by Alan StantonBut let’s not kid ourselves. London’s potential shift from a Dickensian sprawl to a gleaming technopolis doesn’t come without costs. Even though the big corporates are moving in to colonize London, the range of tax loopholes left open to them means their multibillion-dollar businesses aren’t directly benefitting the city — or Britain at large.

Still, in the end there is something infectious about all of this activity.

There is precious momentum, genuine activity and a sense that what is happening could be a vision of something better to come. London is getting ready for its Olympic close-up, and its tech entrepreneurs are starting to think, perhaps for the first time, about going for gold.

Gold medal copyright Shutterstock/David Fowler, London riots used under Creative Commons license courtesy of Alanstanton

  1. Mark Dunbavan Tuesday, July 31, 2012

    The problem with the government is that they only seem bothered now when they could have gained an interest pre-recession. Because it has finally clicked for them that the internet can provide money making opportunities and they want in on it now.

    My only worry is that the “wrecking ball’ that is the government could be the demise of it if we leave it all for them to head up. I already feel sick knowing that the government has called this ‘Tech City’.

    watch this space…

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