How the new mayor can turn London into the world’s entrepreneurship mecca
7 min read
06 May 2016
By now, Londoners will have made their way to the nearest community centre, school or council office, temporarily transformed into a polling station, to cast their vote for the next London mayor. But who will become Boris Johnson’s replacement?
London, the megapolis that geographically at least is the “centre of the world.” Londoners can start the day working (virtually) with Tokyo, Shanghai or Delhi and end the day with colleagues in LA or San Francisco – if they can spare the energy of course.
For ambitious professionals London is a top three global destination and many of those dream of becoming an entrepreneur in charge of their own destinies. Yet, London’s Tech City could see a startup exodus as commercial rents have soared in recent times.
The incoming mayor can exert huge influence to make sure that the city creates the right environment for would-be entrepreneurs realising their dreams.
Here are a few examples of areas where the new London mayor’s leadership can make a huge difference and turbo-charge the whole of London as a mecca for entrepreneurship.
Attract global talent
Talent is the bedrock on which London’s future prosperity stands, yet 35 per cent of CEOs view the skills gap as the single biggest threat to the growth of the tech sector in the next 12 months (Deloitte UK Technology Fast 50).
The London talent pool for high quality STEM (science, technology, engineering, mathematics) graduates and professionals, especially women, is shallow. Quotas are not always the answer, but rules are there to be broken. The incoming mayor must work with the Home Office to set up non-EU STEM quotas for Britain (and London) especially from South East Asia and Latin America.
Affordable housing and offices
What holds London back from an entrepreneurship perspective is the high cost of living and doing business here. The mayor’s office needs to work with local councils and private developers to increase the stock of affordable houses and offices – companies like WeWork, UniPlaces etc are doing very interesting work in this area and should be engaged with.
The current trend of constructing mostly empty residential high rises primarily targeted at investors – only ends up pushing young people out of London, which is a huge brain drain and sucks the soul out of the city.
The new London mayor should focus on higher broadband speeds. Investing in fibre to replace London’s leaky copper pipes is essential – in the UK approximately two per cent of households are connected by fibre, compared to say 60 per cent in South Korea.
In the current economic climate, the billions of pounds of investment needed to achieve this may seem high, but the payback in terms of economic growth is well worth it with some estimates pegging it as high as 20 times gross value added for every £1 invested. A threefold increase (given the existing low base) should be an ambitious, yet achievable target over the next mayoral term.
Continue reading on the next page to see what Boris Johnson’s replacement needs to understand about education, investments and entrepreneurship on the next page.
The trend over the last 30 years in the developed western world has been an inexorable drop in STEM graduates. If London intends to become the entrepreneurship hub of the world, the new mayor needs to reverse this trend. Specialised STEM-focused secondary schools are an idea worth considering.
Similarly, providing significantly, instead of incrementally, increased financial incentives to fresh STEM graduates entering the teaching profession is a must.
Since the creative industries contribute £35bn to the London economy employing 800,000 people, a focus on STEAM (the additional A being “Arts”) subjects in education, as opposed to just STEM, could be even more impactful.
Venture capital trusts (VCTs), enterprise investment schemes (EIS) and seed enterprise investment schemes (SEIS) have been key drivers for startup investments in the UK from individual investors.
Extending some of these incentives to corporates to encourage further investment into some of the UK’s most innovative, fast-growing startups would help to further underpin the entrepreneurial ecosystem in the country.
Investments from corporates could be restricted to particular key areas of the market that the government wanted to develop, for example:
– Cyber security
– Internet of Things (IoT)
– Financial technology (fintech) / Blockchain
– Affordable real estate (with strict affordability metrics)
Entrepreneurship “Centres of Excellence”
London mayoral backing of 200,000 square feet of real estate for incubating startups and small businesses spread over three to five locations across London – a la Google Campus in Shoreditch – would mean more startups becoming long-term success stories.
This should be funded by the Greater London Authority (GLA) and run by private enterprises, ideally startups themselves.
In order to provide heft to the entrepreneurship initiative, the incoming mayor should consider the following appointments for London:
– Chief technology officer: A single point of contact for facilitating and coordinating London’s technology backbone and broadband connectivity, especially critical fail-safe emergency systems.
– Chief digital officer: The primary point of contact for startups and corporates for engaging with the GLA on digital initiatives.
– Entrepreneurship czar: Focus on attracting global entrepreneurial talent to London and overseeing the “Centres of Excellence”.
Are these all ambitious objectives? Yes, of course, but where there’s a will, there’s a way.
These objectives need to be achieved if London remains a top three global destination for high-skilled professionals and ambitious entrepreneurs in the many years to come.
Will the new mayor stand up and be counted on this ambitious initiative?
In one of his last efforts as mayor, Boris Johnson revealed a plan to take 800 London SMEs global with the Mayor’s International Business Programme.
Debu Purkayastha is venture partner at Octopus Ventures