Rents ‘higher than New York’ harming Tech City
The growth of Tech City is being hampered by inadequate infrastructure and a lack of affordable space for fledgling start-ups, according to technology companies.
Tech City, the name give to the Old Street area where technology firms are clustering, is being heavily promoted and marketed by the government in an attempt to stimulate the economy and create jobs.
So far, their strategy has been a success, as the likes of Google, Amazon and Facebook are moving into the area.
However, the collaborative environment, which provides a thriving hub for companies to work together and create more jobs, is being affected by a lack of affordable space for small and fledgling start-ups.
Tak Lo, founder of travel start-up Travelst, said: “The issues are the lack of space as there are more and more start-ups in Tech City.
You may also want to watch:
“Like New York, the start-up space business is booming. The only problem is that London’s real estate is more expensive than New York, so I think very quickly start-up offices will move deeper into Hackney, unless big private players with deep pockets – like Google – come in and help the ecosystem.
“We chose to be in Baker Street because we’re very young, and in terms of expenses we didn’t want to spend a great percentage on space, as opposed to labour and development.”
- 1 Jailed: Former Islington police officer raped children's home teen
- 2 Dame Alice Owen pupils protest over racist language
- 3 Revealed: Latest Covid-related death figures for Islington
- 4 'Risk of thunderstorms' in north London ahead of May 17 lockdown easing
- 5 Tributes paid to founder of Islington's Museum of Funeral History
- 6 Could Islington become a holiday destination?
- 7 Primary school allowed to keep floodlights despite complaints
- 8 Six flee Finsbury Park house fire
- 9 Tollington by-election imminent as Richard Watts joins Khan's 'top team'
- 10 Islington Council set to save Grade II-listed South Library from disrepair
Matt Evans, co-director of the The Hoxton Mix, which rents out space to small start-ups in Shoreditch, said: “Only one in 10 start-ups are successful so initially they don’t want long-term leases and prefer to be based in a co-working environment.
“Once they start growing and become fledgling start-ups, they want their own office space.
“However, they are forced to leave the area because they can’t afford a five-year lease.
“They don’t want to leave the community but feel they have no option.”
Mr Evans, who is also director of content management vendor The Solid State, Paul Street, said that poor infrastructure made it difficult for companies to move out to areas like Hackney Wick.
He said: “An area like Hackney Wick does not have decent infrastructure and I don’t think it will be a viable option for a good amount of time.”
Jennette Arnold, Labour London Assembly Member for Hackney and Islington, said: “The big issues facing start-up firms are well documented.
“Many have concerns about finding affordable workspaces, securing adequate funding and support and getting the utility companies to play ball when it comes to the installation of phones lines and high speed broadband.
“I have heard some reports that some firms have had to wait weeks to get broadband connections installed.
“Given the state of the economy we need these new firms to be up and running as a soon as possible.”