Gigaom

London's Tech Scene Is Having Its Golden Moment


Google's tech campus at East London's Tech City during the official opening in London, U.K., on March 29, 2012.

Photograph by Chris Ratcliffe/Bloomberg

Google's tech campus at East London's Tech City during the official opening in London, U.K., on March 29, 2012.

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.

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

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 in tech during the past few years. Google (GOOG) 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 on the west side 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 such as Lionhead, as well as operating Borg-like (Star Trek) corporate offices in the country for years (albeit from the dreary satellite town of Reading, 40 miles west).

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

It’s worth remembering that the timing here is orchestrated, at least in part. 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. Google Chairman Eric Schmidt, who visited the city on Thursday, confirmed as much when he said his company’s investment in local startups was in large part due 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 adviser 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 instance, has actually had its London office for a 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 (in cringeworthy fashion) 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 such as Wonga, Mind Candy, and Huddle are all well on their way to becoming the billion-dollar businesses Europe’s technology scene craves.

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

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

The U.K., 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 for its own benefit. All of these are blown open now, and nobody is happy.

But let’s not kid ourselves. London’s potential shift from a Dickensian sprawl to a gleaming “technopolis” doesn’t come without costs. Although big corporations 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 as a whole.

Still, in the end there’s something infectious about all of this.

There is precious momentum, genuine activity, and a sense that what’s 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.

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Johnson is a writer for the GigaOm Network

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