The coronavirus crisis will bolster London’s position as a leading global tech hub as society becomes increasingly reliant on the digital economy, a top industry boss has said.
Russ Shaw, founder of London Tech Advocates, told City A.M. that the Covid-19 pandemic will “catapult London forward” and help cement the UK’s status as a “tech nation”.
The UK’s booming digital sector contributed £149bn to the economy in 2018, but has not been immune to a wider economic downturn caused by coronavirus.
However, Shaw said he believed the industry would emerge from the crisis “better-positioned” thanks in part to collaboration between the public and private sectors on ventures such as the NHS contact-tracing app.
“The more technology can do and assist people in this environment the sooner we can get back to an economy that’s working and thriving,” he told City A.M.’s City View podcast.
More broadly, Shaw said the pandemic would accelerate the rate of digital transformation both in the UK and across the globe.
“Everybody is acknowledging that when we come through this pandemic digital and technology is going to be a much more integrated part of our lifestyles,” he said.
Shaw pointed to artificial intelligence firms, cybersecurity providers and education software services as major beneficiaries of coronavirus as millions of people have been forced to work from home.
He described the thriving fintech sector as a “mixed bag”, hailing huge benefits for digital payment providers but expressing caution over fintech firms involved in government loan schemes.
Shaw said that while companies with good business models would be able to respond to challenges caused by the health crisis, some startups would inevitably collapse.
However, the tech chief said that some unviable firms — which he dubbed “zombie startups” — should be allowed to fail.
“[If] it’s an interesting business but doesn’t have the funding or the business model dynamism to survive, then maybe it shouldn’t survive,” he said.
“We shouldn’t be propping up businesses in this period of time that may not deserve to be propped up because that puts more pressure on those businesses that do deserve to be propped up.”
Shaw added: “You don’t want the government to be picking winners and losers but i think those of us in the sector will try to do what we can to support those businesses that deserve to be supported.”