8 Aug 2014
London Bids to be Global Digital Capital, Outstripping even Silicon Valley
London is the world's fastest growing centre for digital development, according to presentations at this year's Internet World expo, with a new sense of a sustained start-up ethos said to be permeating through UK players in the sector.
The tech and information businesses in and around London are growing faster than their counterparts anywhere else in the world, apparently. This, at least, was the conclusion of Dr Michael Mandel, the President and Founder of South Mountain Economics, a Washington DC-based new tech research company.
Mandel was presenting the findings of a specially-commissioned report – London: Digital City on the Rise – as part of the launch of London Technology Week. The report was the third in the series by Mandel and his colleagues, following their earlier assessment of the online strengths of New York and the San Francisco-Silicon Valley region.
According to Mandel, the digital sector in London (and the South East of England) is growing at a faster pace than in either of the two US locations, previously regarded as the global incubators for the industry. The latest report showed 155,000 people worked in the digital industries in London, with that figure likely to top 200,000 within the next 10 years. Overall, the sector is likely to account for some £12 billion ($20.5 billion) of the UK capital's economy.
Against such an auspicious backdrop, expectations were high of this year's Internet World expo, one of London's key digital events and a cornerstone of this year's Technology Week. Kevin Pearce, an Event Director for UBM, organiser of Internet World, was confident that this year's event would live up to expectations.
He said: "Internet World continues to evolve. This year, in addition to an expanded presence from many of the sector's major players, we are focussing on the innovation and creativity being generated by start-ups and the more entrepreneurial companies.
"The sector is moving into a new mature phase, with established tech stocks now essentially buying their future growth rather than building it organically. The new shape of this year's show is, essentially, a response to changes in the market."
While Facebook, Google and Twitter now clearly control the 'digital conversation', many others – notably Yahoo, under the leadership of (former Google executive) Marissa Mayer – are trying to reinvent themselves, deliberately setting out to break down the silos that currently characterise their companies. At Internet World, the emphasis was very much on this renewed culture of entrepreneurialism, with its bid to recreate and sustain a 'start-up ethos'.
With the dual themes of reinvention and innovation running throughout the show, Sarah Bentley, Managing Director of Accenture Interactive UK and Ireland, was keen to stress that digital business is about far more than just incorporating technology into your daily operations. For her, it was fundamentally about how digital businesses should embrace technology to completely reinvent themselves.
She said: "Those who take control and start acting like disrupters in their markets are those who seize opportunities and differentiate themselves from the competition."
It's an approach that could be taken to heart by Tesco, the international retailing giant that accounts for roughly 30% of the UK grocery market. Despite its past successes, Tesco is now facing significant new competition, as well as a number of challenges that were entirely unforeseen up until a few years ago. During the course of the show, Angela Maurer, the retailer's Head of Innovation, was at pains to correct a number of misconceptions about the group.
She said: "Tesco is not just a supermarket, it's also actually a technology company. It's a business that is determined to shape the future of retail on a global basis."
According to Maurer Tesco now employs more than 5,000 staff across the world solely to work on technology issues. It has also now established a dedicated innovation department – Tesco Labs – with a brief to conceptualise how the business might develop over the next 10 years. This new department currently employs 25 designers and developers, as well as a number of researchers and data scientists, all working across three global hubs. Maurer said: "The aim of this unit is to reflect and innovate from a disruptive and/or start-up perspective.
"In addition to its internal resource, the unit is also seeking to actively engage and collaborate with a number of start-ups and SMEs from beyond the Tesco empire. Explaining the thinking, Maurer said: "Research and development – primarily linked to those technologies that will shape future products and services – is the key objective here.
"While we are fully aware of just how huge Tesco is and what it can do globally when it puts its mind, this particular unit's strength lies in its ability to be small, nimble and innovative. Beyond its disruption and innovation, comes development. That's where our other 5,000-plus global technologists will take over.
"We've gone from bricks and mortar to bricks to clicks and we're now moving towards bricks, clicks and mortar. We are working to ensure that the Tesco brand experience is seamless across all our various physical outlets, as well as across the company's digital platforms. We believe technology can animate the high street as well as damage it."
Small is good
Overall, UK exhibitors dominated this year's show, with US companies accounting for some 50% of the overseas contingent. Reflecting the show's dual focus on education and engagement, its major new partners this year included Tesco, Goldman Sachs and Blackberry. These joined a number of its returning high-profile sponsors, notably Barclaycard, DNN Corp, Kentico, IBM and dotMailer. There was also one Hong Kong company in attendance – Vandt International, a Wanchai-based digital marketing consultancy.
As well as the established corporate zones, a number of new themed areas made their debut at this year's show. Among the most popular were the Internet World Lab (sponsored by Microsoft and Accenture) and 'The Marketplace', a zone where entrepreneurs could pitch their ideas to online investors.
The Internet World Lab zone focused on providing an intensive hands-on learning experience over the three days of the show. It was designed to offer start-ups a variety of advice and guidance from a number of industry luminaries. This saw hundreds of delegates quiz an array of Microsoft-funded experts on every facet of new business creation.
Over at The Marketplace, a steady stream of would-be entrepreneurs pitched for funding in a Dragon's Den-style environment. Clearly designed to be particularly delegate-friendly – with the provision of strategically-positioned bean bags around the open space – some clearly overwhelmed attendees dozed off here in between the life-changing sessions.
With regards to the show proper, mobile and its various applications, of course, provided much of the show's focus, alongside e-commerce, hardware and software development. A strong showing this year also came from the many presentations highlighting the issues of security and engagement online.
Lawrence Dudley, a Director of Parallax, a Leeds-based digital agency, shocked some attendees by suggesting that SSL – Secure Sockets Layer, the industry's standard for encrypting links between server and client – should no longer be wholly trusted. Explaining his concerns, he said: "The internet is increasingly breaking down as a result of the huge number of increase in attacks on e-commerce platforms."
Other attendees, however, were more sanguine. Ian Foddering, Chief Technology Officer and Technical Director of Cisco UK and Ireland, the hardware and networking specialists, insisted that a sense of perspective ought to be maintained.
He said: "We live and work in a networked global economy. As the network grows and, effectively, sits at the core of our daily lives, security and intelligence will become even more critical than before. Remember, though, humans – currently at least – remain in control. In many ways, that should be quite reassuring.
"Equally importantly – and probably of much greater interest to those with an eye on future global commercial opportunities – in the midst of this age of networking and global connectivity, roughly 99% of the world is not yet connected to anything like its full potential."
Internet World 2014 was held at ExCel in east London from 17 to 19 June. Over 125 companies took exhibition space this year and the total number of visitors rose to almost 10,000, up from just over 9,000 in 2013.
Nick Jaspan, Special Correspondent, London