This month's announcement that London technology startups raised more than £1 billion in venture capital investment in the first nine months of 2014 is a firm indication that London's tech community really is playing in the big leagues now. It's not just another Silicon Valley copycat, but an established tech community where viable, high-turnover businesses are being built and nurtured.
Everywhere you look, tech in London is booming. In some areas it's actually outstripping Silicon Valley in terms of growth at the moment, with employment up 11% in the last five years. At the same time, research from Oxford Economics estimates that London's tech businesses could bring an extra £12 billion and 46,000 jobs to the city by 2024.
This is all excellent news, and it's undoubtedly a good time to be a startup. But, as any entrepreneur knows, a young business is always at risk of failure. It's true that it is much easier to start businesses today than it was during the first dot-com boom. Great advances in cloud computing, in particular, mean that companies can get started faster. Without the need for huge upfront technology investments and plenty of cost-per-seat models on the market, startups now have great agility and flexibility to quickly grow (and shrink) in size.
However, while it's easy to get started, it takes more than just money or technology to build a successful business. The technology market is extremely competitive, and the core skills that new companies need to thrive in this sort of environment are still in short supply. And while funding is more accessible in 2014, money still isn't growing on trees. Business cases to secure investment need to be stronger than ever in a more competitive environment, and VCs have a lot more choice of who to give their money to and are just as careful about who they invest in.
One important lesson from this is that big, eponymous tech businesses still have a crucial role to play in nurturing startups, whether they're in London or anywhere else in the world. Large, successful tech companies are in a great position to share their resources, time and skills with smaller startups to give new companies the accelerated starts they need. By granting access to resources and mentoring, both so important to young companies, larger organisations can themselves benefit from exposure to new ideas, energy and innovation while acting as a hub for members of the tech community.
Another way that large tech businesses can add value is by providing much-needed funding to businesses with real potential. Just look at Salesforce's own €5 million Innovation Challenge, launched in 2013, which has already given more than 450 European startups the opportunity to pitch to leading investors while opening the door to the critical enterprise app market.
Today's startups might well turn into competitors within a few short years, but there is more to be gained by contributing to a thriving tech community than standing apart from it. Industry players must give back to the sector in order for the market to continue to grow - and large, successful tech businesses have a responsibility to encourage and nurture innovation in the startup community however they can. This won't just have the major economic benefits promised by this month's announcements - it will have positive repercussions for our own futures too.Suggest a correction