Research from UHY Hacker Young reveals that new businesses are shunning the iconic postcode
The Silicon Roundabout name is often attributed to Matt Biddulph, co-founder of Thington, the smart home app, who quipped back in 2008 that there were so many tech startups setting up shop in the EC1V postcode that before long estate agents would start referring to the area as Silicon Roundabout. And while he may have only been half-serious, his prediction soon came true and the term has been added to the national vocabulary. However, the glory days of the area around the Old Street gyratory system may soon be over.
Through a Freedom of Information Act request to HMRC, UHY Hacker Young, the accountancy firm, has revealed that only 3,070 new startups set up shop around Silicon Roundabout in the business year ending in March 2016. That’s a drop of over 70% compared to 2015 when 10,280 businesses were launched in the area. These numbers don’t just include tech businesses but startups from all industries too. This plummet means that the unofficial centre of the UK tech movement has fallen from being the first to the sixth place in terms of new business creation in the UK.
Commenting on the startup exodus, Colin Jones, partner at UHY Hacker Young, said: “[The Silicon Roundabout] is a victim of its own success. The Silicon Roundabout area gained popularity with internet companies originally due to its historically low rents. Now that rents have soared, the area has lost its competitive advantage.”
However, London’s startups haven’t moved too far. Just north of Silicon Roundabout, City Road saw a 75% increase in new businesses being set up in the same period. With the number of new ventures increasing from 8,400 in 2015 to 14,710 in 2016, it’s now the top location in the UK for new business launches. The Leicester Square area was the second biggest hotspot, having seen a 142% increase. This could be attributed to tech giants such as Google setting up their new office there, attracting tech contractors and startups to follow suit “[It’s] evident that new business creation is heavily concentrated in London, which reflects broader trends as the capital’s economy continues to power ahead of regional cities,” said Jones.
In other words, it seems as if London will remain one of Europe’s best cities for innovation for a while longer, though startups may be spreading themselves out across the capital a bit more in the future.