Tech City: Study reveals start-ups are more likely to survive in Hackney than Islington
- Credit: Archant
It seems in today’s world of cutting edge technology and entrepreneurial spirit, you can’t browse through a news site without reading about the latest start-up launch.
And while technology start-ups dominate the scene in Tech City, the appetite for growing your own business in a whole host of other areas has never been greater. It feels a bit like anyone and everyone who can use a computer keyboard is quitting the nine-to-five and striking out on their own.
But just how successful are start-ups on the whole? What are the odds of success if you were to register your own business, technology-based or otherwise, tomorrow in or near Silicon Roundabout?
Luckily, you no longer need to worry about such questions. Cloud-based phone company Vonage has just released the results of its extensive study into the success rate of London’s start-ups.
Working with the Office for National Statistics, Vonage looked at how many of the 581,173 start-ups launched in 2014 were still operating at the start of 2016, with the results for London categorised into boroughs.
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And it’s a mixed bag for Tech City. Hackney, where 25 per cent of the start-ups launched in 2014 were technology-based, comes in at fifth out of 33 London boroughs, with a 69 per cent survival rate for businesses in the period studied.
But the data does not bode well for start-ups from neighbouring Islington and Tower Hamlets. The East End, where 11.4pc were tech companies, came 30th in the list, with a success rate of 55.8pc.
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And it was even worse reading for Islington, where 11.2pc of start-ups are technology-based. The borough came bottom of the table, with a survival rate of just 43.4pc, nearly 10pc lower than 32nd place Enfield.
London itself came in at a disappointig 45th place out of the 50 areas of the UK surveyed.
So what accounts for such a poor showing from Islington, a borough that is perhaps most closely associated with Tech City?
“There are obviously a varying number of factors that contribute to start-up success,” explains Roger Vigilance, marketing director of Vonage UK.
“Of course it’s dependent on the unique business type itself.”
Vonage hasn’t prepared the data to get full insight into Islington’s position, he adds, but the fact that “companies in Tech City may be more ambitious on average than others” is one possible explanation as to why Islington finds itself at the bottom of the pile.
While the prospects for companies starting up in Islington may look bleak, the situation is not all bad, Roger explains. Referring to Islington, he says, it’s possible those ambitious start-ups have a “lower chance of survival but a better chance of building a great company”. There’s ample evidence of this being showcased over the years in Tech City.
In addition to success rate. the broadband speed of each borough as well as the available pool of talent was measured by the survey. And while it does not pretend it can predict the success of any start-up based purely on the area in which it launches, Roger does have some theories as to why some areas are more successful than others – and suggested that perhaps it may be worth getting away from London altogether for the best chance of success.
“There are many factors. In addition to those in our report, how well a new business presents itself to the market will be very important. Attracting customers and not turning them off for avoidable reasons will be vital for most new business,” he says.
“There is unlikely to be a simple answer or single factor that determines success. Based on the metrics, one interesting factor was [where companies have] close proximity to London [but are] in the heart of the comparatively prosperous south.
“For example, Winchester, which ranked number one for the UK, may have increased advantage to nearby graduate pools from Oxford and Cambridge, and distance to London may be influential to the strongest performing trade – transportation.”
To see the results of the full study visit the Vonage website.