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Shoreditch, London’s Silicon Valley booming

Shoreditch, London’s Silicon Valley booming

 Photo shoot - Shoreditch/Old Street

According to David Cameron, Shoreditchis the future for the country. 3 000 start-up came naturally in London.

A light parallel can be drawn between the gold rush in Western America in the nineteenth century and the current boom in East London, a new Eldorado for start-ups. In both cases, it all started with an error of nature.

 In 1848, an American, James Wilson Marshall, built a sawmill in Sierra Nevada and stumbled on nuggets of precious metal in a river. Nearly two centuries later, the little district Shoreditch, bequeathed his name to the Silicon Roundabout and became the starting point for the British Tech city. It is here, in the East End that heavyweight’s e-economy, such as Google, Facebook, Amazon and Yammer, the social network portals for companies acquired by Microsoft in July, put their bags in recent months.

The development of the Silicon Roundabout is dazzling. In 2008, only a dozen start-ups were installed around the roundabout at the Old Street, the heart of Tech City. Among these pioneers, there are many web-companies specialized in the music world. Including Songkick, Last.fm (acquired $ 280 million by CBS) or Groupspaces.

“There is a strong connection between the actors of new technologies and the London music scene,” says Olivier de Simone, head of the music department at Webdoc, a platform to create interactive documents.

If in 2012 the melody is not exactly the same, almost a quarter of the companies present in Shoreditch are still related to the film and music industry.

Iain Dodsworth, the founder of Tweetdeck, the famous application for managing social networks, also began his business here. The acquisition of the start-up by Twitter for $ 40 million in 2011 (approximately EUR 31 million) was the first slam dunk of the Tech city. A first step in the growing competition which opposes the Silicon Valley, including the city of London was inspired to shape the “Valley”. In September 2012, nearly 800 companies from the digital sector were established in Shoreditch.

Even David Rowan, editor of the British edition of wired magazine, a reference on technology, said “the enormous and rapid growth of Tech City of London was a surprise for our team, so we deal with the subject every month.”

But what is the role of London in the world? According to the reference classification, though still largely imperfect, Start-up Genome (a company specializing in the collection and analysis of data from start-ups), London is the third high-tech hub in the world in terms of size.

The proactive government policy

Upon his election in 2010 for the head of government, David Cameron made ​​the development of the Tech city priority, as “one industry future in Britain.” Several laws have been passed to attract the digital cracks. As regards finances, since 2010, the start-up settling in East London has been exempt from 5,000 pounds (about 6,100 euros) payroll taxes for each of their first ten employees. Another tax benefit is that a start-up investing more than 100,000 pounds in Shoreditch also benefits from a 50{84cd2a1ed79640e7d0414365cdf56528b155d8417f8ab9b27627206ef90f1f75} reduction in their taxes.

Francois Hollande visit to the UKThe conditions for obtaining visas and work permits have been greatly facilitated to encourage foreigners to come and work in the Silicon Roundabout. “Today, you can recruit guys in San Francisco in a few days they will be in good standing come and work here,” says Stephen O’Reilly, Director of International Sales Mobile Roadie, a start-up specializing in creating applications for smartphones on request.

The law on intellectual property was also reformed by David Cameron following the American model, which offers more freedom, especially to attract Google.

The financial strength

But there are other highlights. “One of the strengths of Silicon Roundabout is the proximity to the City, Europe’s leading financial centre “says Georg Ell, general manager of Yammer office in London.”The start-up like ours can benefit from a strong financial support for their investments.”

The success of Yammer symbolizes this connection. Four years ago, when implanted on the banks of the Thames, the California Company had three employees who shared an open space with several other start-ups. They are now installed in 85 luxurious three-storey buildings at the Great Eastern Road, close to the Old Street.

In 2011, the British capital was the European city where U.S. venture capital invested the most, according to the Tech city investment organization (TCIO). The arrival of Silicon Valley Bank (SVB), American financial institution specializing in the high-tech sector, in June 2012, is also a turning point. “We have already paid millions for start-ups in the UK but we are looking to turn this into billions very quickly “, said Phil Cox Director of SVB in London on the BBC in June. “It is very important that an institution like the SVB-the pulse of the Valley come here to fund investors,” says Julie Meyer, manager of ACE Fund, a British venture capital.

A partnership between Barclays Bank and the working of the Central Tech city -a huge workspace for start-up, was also signed in June for a period of five years. This lucrative contract which aims to support the digital business should “potentially generate 350 million pounds of revenue,” according to TCIO.

A Post-OJ effect?

The Olympic Park, the nerve centre of the 2012 Olympics, is a stone’s throw from the Silicon Roundabout. The benefit promised by the government to the Tech city is, however, difficult to quantify. “For the moment few companies want to settle near the Olympic Park, the creative energy of the high-tech industry here in Shoreditch” says Georg Ell. But Mayor Boris Johnson, “highlighting the organizational know-how of our city will encourage businesses to settle in East London.”

Meanwhile, Silicon Roundabout has organized its own Olympics this summer, the Start-up games. A British company specializing in the development of high-tech materials, Versarien, won the competition. As a symbol of the growing ambition of Shoreditch who wants to medium term itself as the second high-tech world, behind Silicon Valley. And transform the ugly roundabout Old Street into gold.