Why Having a U.K. Base Can Be a Competitive Advantage, Despite Brexit
Despite the growing concerns around Brexit, the U.K. is a place where entrepreneurs should consider launching a company or opening an office.
Digital tech, in particular, is a crucial contributor to the U.K. economy and employment. Research shows that the U.K.'s digital tech economy is growing 50 percent faster than the broader economy. In 2017, Tech City UK reported that the digital tech sector's contribution to the UK economy totaled £97 billion.
The Institute for Public Policy Research describes London as an “international digital powerhouse,” as it remains Europe's leading city for capital investment by a large margin. The report specifies that capital investment in tech in the U.K. was $7.17 billion in 2017, which is well ahead of any other European country. Furthermore, Coadec states that London is one of the leading places to access capital and scale a business.
In the face of uncertainty surrounding Brexit, the U.K. offers many competitive advantages for businesses. Here's why entrepreneurs should consider launching a company or basing an office in the U.K.
London is a financial hub.
London remains one of the leading financial centers of the world, drawing entrepreneurs from all over the globe. The city has been the economic hub of the U.K. and a significant trade and business center since the Middle Ages. It's home to some of the largest financial institutions, including Bank of England, London Stock Exchange, Barclays and HSBC -- the latter two being the largest banks in the world.
London's vast number of financial services and reputation as an integral financial center make it a top spot for those looking to start a business or open an office here.
Local talent is strong.
While the U.K. frequently attracts international talent, it's important to note that London, in particular, boasts an incredibly talented workforce. London is home to more software developers than any other European city, with 250,000 software developers across the capital -- well ahead of Paris with 160,000 and Berlin with 85,000.
Many global tech companies are taking advantage of London's strong talent pool and vibrant startup ecosystem. For instance, Apple announced it was moving into a massive new European headquarters in London in 2021, while Facebook plans to double the size of its London office.
VC funding is on the rise.
Despite Britain's decision to leave the EU, businesses in the U.K. continue to raise an enormous amount of funding. British tech companies have received more than £5 billion in VC funding, which is more than France (£1.55 billion), Germany (£2.15 billion) and Sweden (£644 million) combined. London's tech firms alone have snagged more than £4 billion in investments, well ahead of its major rivals Paris (£1.14 billion), Berlin (£814 million) and Stockholm (£542 million). Financial technology and artificial intelligence are two of the hottest areas where VCs are putting their money – together accounting for more than half of that £4 billion.
There's no shortage of VC funding for entrepreneurs looking to launch a company or open an office in the U.K.
It’s the capital of AI in Europe.
The U.K. has made significant progress in AI development as investment and government support grows in this sector. In 2017, the country placed fourth in AI globally. However, the U.K. has since quickly advanced to the third position and is on track to continue climbing up the ranks.
In 2017, London's investments in AI totaled to more than $250 million, which is more than Berlin ($22.42 million) and Paris ($126.16 million) combined. In 2018, AI funding reached $400 million.
The U.K. government has also taken a proactive role in funding AI academic research, providing financial support for 1,000 students to complete AI PhDs. This supports universities that have sizeable artificial intelligence programs, such as Cambridge and Oxford.
London is one of the most attractive destinations in the world for AI specialists, such as data scientists or machine learning engineers. What’s more, the U.K. capital has numerous AI suppliers in global industries, such as finance, insurance, healthcare, sales and marketing. These industries represent a massive opportunity for future growth for London's AI ecosystem.
There's no language barrier for English speakers.
English is the universal language in the U.K., which is a significant advantage for U.S. companies. A shared language, plus a thriving tech scene, makes London the perfect place for US tech companies looking to expand into Europe. While there are a few minor differences in vocabulary, there is little to no language barrier for U.S. companies coming over to do business in the U.K. For global businesses, the neutral timezone allows companies to communicate and collaborate with clients or colleagues on the U.S. east coast as well as in Asia.
The U.K. still leads the way.
It's uncertain how Brexit will impact the U.K. However, entrepreneurs shouldn't let this deter them from starting a business or basing an office here. From a bustling financial hub to substantial VC funding, the country offers numerous advantages for those looking to do business in the U.K.