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European technology hubs—how they stack up

Posted on 04 Mar, 2013 by in Huddle news | Leave a comment

As I prepare to leave San Francisco to embark on a whistle-stop tour of some of the European technology hubs (I’m speaking at the Web Summit and Disrupting Europe conferences in London, Dublin, London (again), Amsterdam and Berlin along the way), I wanted to take a look at what each city has to offer the next Facebook / Google / Apple etc.

London

Spiritual home of Huddle and Europe’s undisputed financial center, London’s startup scene has exploded from nascent to booming in the last five years. In terms of venture dollars (or pounds, whatever) invested, London still sits behind the traditional hot spots of the San Francisco Bay Area (Silicon Valley), Boston, and New York but leads the pack as a western European technology hub by a considerable margin.

The recent £50 million investment in east London’s technology hub ‘Silicon Roundabout’ (a name jokingly coined by Dopplr CTO Matt Biddulph in 2008) from the UK Government has put the area back in the spotlight. David Cameron aims to make ‘Tech City’ – the area around Old Street (c.f. Silicon Roundabout) – one of the biggest technology centers in the world with the government providing several big cash injections to kick-start it.

Despite the smaller early stage investor community and a comparatively low number of high profile technology exits, London has several huge advantages over its American cousins. Firstly, it is home to several huge sectors (finance, advertising, legal, music, arts, and fashion to name just a few), which gives industry-targeting start-ups great access to early customers. Silicon Valley may have a lot going for it but a ton of non-technology industry customers isn’t necessarily one of them.

Secondly, between London’s numerous universities and colleges (Imperial, Kings and UCL for a start) plus the dozens of well-regarded universities within a two hour drive (Oxford and Cambridge head the list, obviously), London has access to a huge amount of young talent. This is an area where the UK is fast catching up with Silicon Valley. Indeed, many US companies are swarming Tech City (in the heart of the European technology hub) recruitment fairs, such as Silicon Milkroundabout, looking for talent on this side of the pond. As Silicon Valley has shown us, universities are a great place to find new talent – both Google and Facebook were developed on campus.

Lastly, London is well positioned to act as a launch pad to both mainland Europe and the US. As traditional geographic borders become less important to today’s businesses, easy access to Europe’s markets and a similar culture and language (similar!) to the US make it easy for London’s startups to make the leap to what’s next, almost regardless of location.

Berlin

Famous for its creative vibe and underground music and art scenes, Berlin is finally gaining official recognition as a European technology hub and Silicon Allee is now set on rivaling Silicon Roundabout. And with the head offices of Siemens and Bombardier Transportation in the city, and tech goliath Google setting up an office there, there is certainly a tech pedigree.

While often selected as a launchpad for internet start-ups, boasting a wealth of creative expertise and a bright young global workforce, Berlin only recently received the backing of the city senate. The starting point for the official push is a €500,000 marketing campaign, which sees the Berlin Senate Department for Economics, Technology and Research, Berlin Partner, the Berlin Chamber of Commerce and Industry and SIBB e.V team up together. According to the announcement last August, Berlin’s technology, media and creative industry includes 36,841 companies with an annual turnover of €26.11 billion. These companies employ 181,217 people directly and approximately 314,000 people in total.

So what success stories have come out of Berlin? Well, you’re likely to have heard of audio platform SoundCloud, which now boasts more than 10 million users and is regularly touted as a true innovator in the music industry, or social game developer Wooga. But what attracts the likes of SoundClound co-founders Alex Ljung and Eric Wahlforss or Edial Dekker of Gidsy? There’s creativity, bright technical sparks and the cost of living is far cheaper than the likes of London. There are buzzing tech hubs such as“The Factory”, which boasts not only SoundCloud but also Mozilla and Toast. Location-wise, companies in Berlin can benefit from better links to Russia and Eastern European technology markets.

The Berlin venture scene is certainly smaller than London’s and it isn’t uncommon for German startups to head west to the UK when seeking their first round of institutional funding.

In my next post I’m going to take a look at Dublin, Amsterdam and Tel Aviv. Have I missed any other great European technology hubs? Let me know in the comments!

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