London’s technology sector may be basking in record levels of investment – £549m in the first quarter of this year alone – but maintaining its success will become increasingly dependent on the capital’s infrastructure being fit for the future.
The growth of the digital economy over the past few years has irreversibly reshaped our city. Between 2010 and 2013, there was a 92 per cent rise in the number of new digital firms incorporated in inner London alone, and 27 per cent of the capital’s jobs growth now comes from the tech sector.
But London faces an increasing challenge of scale. If this growth momentum is to continue, it must be underpinned by world-class infrastructure. The problem is simple: London cannot continue to support this level of growth without tackling a series of serious bottlenecks.
This means ensuring that London is equipped with world-leading superfast broadband and transport connectivity, along with accessible and affordable property. The capital must stay ahead of other European tech hubs, such as Berlin and Stockholm, which could threaten our status as the leader of digital Europe.
Nearly half of Tech London Advocates see current broadband provisioning as damaging the capital’s reputation as a centre of digital excellence. The fact that London is twenty-sixth in the European broadband speed rankings – behind Tallinn and Riga – highlights the critical need to address the dearth of high-speed connectivity in the city.
Infrastructure features in both the Conservative and Labour manifestos, but these are long-term problems without straightforward solutions. Neither the government nor the private sector can solve our challenges alone; it will take support, investment and expertise from across politics and business to deliver the infrastructure our digital economy craves.
Effective collaboration is also key to addressing our property and transport infrastructure woes. As the digital sector continues to grow, the property industry will need to match demand for space. And with office rents in Shoreditch doubling in just a few years, any future government must help ensure business rates and rents do not cripple London’s burgeoning, but often cash-strapped, startups. The city risks both driving out its growth companies and appearing much less attractive to those looking to relocate here.
The government and the transport sector must work together to tackle the increasing strain on the city’s transport and aviation capacities. There will be a 80 per cent increase in demand on London’s rail network by 2050, while airports are already reaching breaking point. Addressing this crisis is vital to ensuring our tech firms are able to both source the best global talent and export their innovation abroad.
The infrastructure challenges facing London are varied, and there is no quick fix solution. Installing new fibre-optic cables, building new offices and expanding airports are costly and lengthy processes. We also need more standardised planning tools between local councils and property owners across London’s boroughs, and a strong tech sector voice in government policy meetings. But however difficult it might be, giving our tech sector the infrastructure it needs is vital if we are to underpin the growth of the digital economy in the years to come.