Much to the frustration of former prime minister David Cameron and chancellor George Osborne, the UK is yet to produce a tech giant in the same league as Apple, Google or Facebook.
Although London’s so-called “Silicon Roundabout” – the area surrounding Old Street – has gained traction among the startup community in recent years, there is a multiplicity of reasons for why the UK is lagging behind both China, the US and, increasingly, various South-East Asian nations.
A huge part of Silicon Valley’s success can be attributed to the inherent qualities of American culture. The Valley is chock-full of axioms that border on clichéd, such as Facebook’s “move fast and break things” or the oft-cited “fail fast, fail often”. In his now infamous Stanford commencement speech, Apple founder Steve Jobs ended with the statement “stay hungry, stay foolish”.
A number of these mottos might seem ill-conceived but there can be no doubt they are symptoms of a society that does not take itself too seriously. More importantly, a glance at US bankruptcy laws – which often permit companies to file for bankruptcy only to return to operations after a brief hiatus – shows that the country truly has a culture where failure is not something to be afraid of.
By contrast, the UK often equates success with going to university. A degree in just about any field will permit a student to enter most graduate schemes unless they are specifically technical. There is a long-held British belief that more degree-holders lead to more high-quality jobs, which ignores the reality that jobs are created by businesses, entrepreneurs and indeed, startups.
Given that 95% of startups fail within a few years, America’s willingness to fail is a huge benefit over the more risk-averse UK. It is this mindset – along with fantastic ideas and abilities – that prompted Bill Gates, Steve Jobs and Mark Zuckerberg, for instance, to drop out of university and go it alone.
Despite a number of the world’s top universities calling the UK home, there is a dearth of homegrown STEM students. Famed British engineer James Dyson has said that roughly 90% of engineering researchers come from abroad to work in British universities, which often causes tension with a government that is actively trying to reduce immigration figures.
Unlike many other nations, the UK values degrees in humanities and social sciences very highly. In fact, just 9% of candidates in the 2017 general election held STEM degrees, which is comparatively far less than other nations – 20% of MEPs, for example, have STEM degrees.
The problem often starts within the education system. In 2016, just 2% of all A-levels taken were in computer science. This education gap continues into higher education and has resulted in up to 40% of STEM employers finding it difficult to fill positions. By contrast, Silicon Valley is next door to Stanford University, which provides the region’s startups with a conveyor belt of the world’s top engineers, computer scientists and technicians.
The Valley might have Stanford but London is home to a number of world-leading universities too. Imperial College, the London School of Economics and University College London are all in the heart of the city; both Oxford and Cambridge are just short train journeys away.
More importantly, London is also a global financial hub, where dozens of the world’s top financial institutions are headquartered. The UK capital essentially has the potential to become an amalgamation of both Wall Street and Silicon Valley, provided it can continue to attract startup talent. This proximity to financial institutions is one of the main reasons that London’s startup scene is ahead of Berlin, Paris and Stockholm.
Furthermore, the Tory government’s efforts at reducing corporation taxes have wooed major tech players such as Google, Facebook and Apple to set up new headquarters in London – another major contribution to the overall tech ecosystem.
Much of Silicon Valley’s success is down to immigration. Google, for example, was co-founded by Sergey Brin, a Russian immigrant, and is currently headed by Sundar Pichai, who hails from Chennai in India. Yahoo was started by Jerry Yang, a Taiwanese American, while Tesla and SpaceX are headed by Elon Musk, a South African-born Canadian American.
Post-Brexit, the government must ensure that the vast wealth of tech talent from across the EU enjoys continued access to London. Furthermore, unlike the present regime, which actively tries to prevent graduates from outside the EU to remain in the UK, successive policies should encourage them to stay.
Alongside this, the UK is actively taking steps to reform its education policy to be more STEM-focused. Provided that this is executed successfully, there should soon be a long tail of home-grown STEM talent filtering through the British education system that is determined to build the next big thing.
There can be no doubt that London is a great tech centre that benefits from its closeness to both world-leading academic and financial institutions. However, there are essential policy and cultural problems that threaten to restrict its future expansion. Provided these can be resolved, the next Google or Facebook might be born in a London postcode.
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