70% of London tech firms ‘struggling to grow’

Seven out of ten of tech firms in London have found it difficult to expand and grow the company within the capital.

That’s according to a new survey commissioned by Business Birmingham asking 155 middle managers from London startups.

The survey, carried out by YouGov, it found that 48% of those surveyed saw the cost of running the business as too expensive.

Other problems included 24% claiming they were unable to find qualified staff and 25% citing lack of affordable office space.

Rising rents?

The survey found that rent prices in the past year have risen by 46% in the centre of Tech City.

However in an investigation by Tech City News in May of this year found that rents in Shoreditch were actually rising at the same speed as other districts in the capital.

37% of the pollsters complained that one of the above factors has lead them to miss out on potential business.


Tech City Birmingham?

Over 60% believed that the UK would benefit from having bigger, stronger tech hubs outside of London.

Business Birmingham suggest their home city can take business away from the capital.

Birmingham is currently home to over 6,000 tech firms which bring in £768m to the local economy.

Larger companies including ASOS, Virgin Media and Droplet have all adopted Birmingham as a base.

Pete Marsden, CIO of ASOS believes there were huge advantages for a company like ASOS to expand beyond London:

“Birmingham has the space, talent and vision we are looking for and is still in easy reach of our headquarters in London.”

“Although it wasn’t part of the business case for locating there, the unique culture of Birmingham’s digital cluster and its potential to become an e-commerce hub sealed the deal for us.”

‘Not the full picture’

In statement, a Tech City spokesperson said:

“This is not a picture we recognise. We now have over 1,500 companies benefiting from the access to talent and investment that the Tech City community provide.”

“Rents in Tech City are still half the price of west London and cheaper than King’s Cross and the City. Increases are caused by demand from a lot of growing companies combined with constrained supply.”

“We’re working hard with developers to help them understand the needs of growing tech companies to help increase affordable office space.”