Some 78% of technology startup owners in London and the South East are considering leaving central London over the next five years, research from Sussex Innovation has found.
This is well above the 63% of small business owners who are also considering the move and and has led the business incubation network to call the sustainability of East London’s ‘Silicon Roundabout’ into question.
Mike Herd, executive director of Sussex Innovation, said: “With office rental costs soaring in London, it’s no surprise that entrepreneurs are looking to move out of the capital.
“At the same time, we’ve seen local businesses moving away from areas like Croydon due to a lack of flexible facilities designed to support businesses during rapid growth.”
For its research Sussex Innovation polled over 500 business owners, entrepreneurs and senior decision makers in London and the South East.
Respondents cited rising property prices (78.5%), difficulties accessing funding and investment (26.6%) and securing top talent (24.1%) as some of the big reasons behind their consideration of relocation.
Sussex Innovation, which is the wholly owned by the University of Sussex, released its findings at the unveiling of its first off-campus incubator hub in Croydon.
The hub will provide a base for up to 30 high-growth potential companies with over 300 employees and support more than 100 local businesses through its network.
Herd said: “Incubator hubs such as Sussex Innovation – Croydon are being established to help the next generation of entrepreneurs.
“We know that growing businesses favour good transport links and competitive property rates over the perceived cachet that a London address provides, but still need access to markets and expert advice, making Croydon the next likely epicentre for entrepreneurs.”
And Chuka Umunna, Labour’s shadow business secretary, who attended the launch, heaped praise on the new hub.
He said: “Sussex Innovation’s new Croydon Campus has an exciting future ahead, with huge new opportunities being created for the local area by helping spur the creation of hundreds of new jobs and assisting businesses in starting up, growing and innovating.
“This is crucial at a time when more and more people are considering starting out on their own and setting up a business, and when we want to make it easier for everyone to pursue this route, regardless of their background.
“It also provides a fantastic example of the way in which universities can provide huge benefits to the local communities in which they operate, supporting a thriving business and start-up community and driving growth.”
Over the next three years it is anticipated that the first tenants of Sussex Innovation – Croydon will generate £6m in turnover and raise £1m in investment.