The government’s drive to encourage digital innovation is hitting a snag on silicon roundabout, thanks to rocketing rent prices, according to research from accountancy group UHY Hacker Young.
Located between the East End and Old Street, Silicon Roundabout is famous for attracting the world’s biggest names in digital, including Facebook, Amazon, Google and Intel, writes Digital by Default’s sister publication SME Insider.
However, with rising rents and a lack of affordable office space, some of the UK’s brightest minds are turning their backs on EC1V, with the accountancy firm finding that startup generation has fallen by more than a third in the last year (year ending 31st March 2015), from 15,620 to 10,280.
Other areas benefiting
According to Hacker Young partner Colin Jones, the area’s steep increase in rent is allowing other areas to become the home of new tech talent, including City Road in Central London.
“Silicon Roundabout has almost become a victim of its own success,” said Jones. ‘‘By attracting larger firms into the area, rents increase, available space decreases, and the smaller start-ups that were initially attracted to the area are forced out into neighbouring areas.”
The accountancy group also discovered that startup numbers in City Road increased 479 per cent in the last year, from 1,450 to 8,400, but is adamant that Silicon Roundabout is the official home for UK tech firms.
‘‘Silicon Roundabout is still at the forefront of national business creation, and it is still the epicentre of the UK’s technology industry, attracting both start-ups and larger firms to the area, such as Cisco and Amazon,” continued Jones.
Jones added that the majority of Silicon Roundabout’s new businesses will be micro-firms, including ‘‘one-man bands such as individual programmers or media consultants.”
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