Google’s Campus, the Californian giant’s first start-up tech hub, was opened to great fanfare by Chancellor George Osborne on Thursday in London’s Silicon Roundabout. The building will offer 100 new technology companies desk space, mentoring and cutting edge facilities and is seen as a huge boost for London’s Tech City project, already bathed in rosy glow after last week’s tax breaks for creative industries.
For the government, Thursday’s opening ceremony was an opportunity to restate their commitment to the high tech economy:
“We want to make the UK the technology centre of Europe,” said George Osborne, “Our goal is to help you realise your goals. Let’s fill this building and indeed this city with start-ups.”
The Chancellor even went as far as to write an open letter to the tech sector in the Financial Times (FT), co-authored with Google Chairman Eric Schmidt. Entitled “Californian dreaming in such a British way”, the letter makes evident the extensive relationship between Britain’s ruling politicians and Google.
It's a relationship which has caused tech blog, GigaOm, to sound a note of warning:
“Over the last few years, Google has a built up a multitude of ties and links to the British government and senior political leaders," they write, "and as a result it seems to hold significant sway over the Cameron cabinet”. They provide a number of examples including
• Eric Schmid’s role as a member of the Prime Minister’s advisory council on business
• Conservative strategist Steve Hilton links to Google. His wife is Google’s global head of communications, Rachel Whetstone
• David Cameron’s argument, prior to becoming PM, that Britain’s National Health Service should be using something like Google Health for its digital record keeping.
• A review of intellectual property, with strong ties to Google’s supposed view on the subject.
However should playing court to Google be classed as a bad thing? The United States is the largest source of foreign direct investment to the UK, with London's 'light-touch' regulation in recent years attracting a massive outflow of capital from New York. Likewise the United Kingdom is the largest single foreign direct investor in the United States. British ideas, classical and modern, have also exerted influence on US economic policy. American and British investors share entrepreneurial attitudes to increase their competitiveness against, for instance, India's developing service industries.
Focussing now on the technology sector and developing relations with one of its superpowers makes sense, given that the internet economy contributed £121bn to the overall UK economy in 2010, equivalent to 8.3 per cent of gross domestic product, according to a report by the Boston Consulting Group earlier this week.
For Google, the advantages of setting up in the UK, are less obvious, the Shoreditch campus is not, on the surface, a profit-making scheme and has been characterised as a gift to the community.
“We were lucky to have been very successful in the UK and we wanted to give something back,” said Matt Brittin, Google’s European managing director.
It is an opportunity for the internet giant to recruit, and get close to the European action. with the huge amount of promising young start-ups setting up in London’s East End growing from 200 in 2010 to more than 700 today. The Shoreditch entrepreneurs are excited about the scheme; Some 800 companies have applied for desks within Campus.
Whatever your view of Google and its politics, there seems to be no doubt that the internet giant has brightened the spotlight now shining on this once forgotten corner of the city. Last year alone, we saw the Technology Strategy Board offer over 200 startups in the area the opportunity to apply for £100,000 in grants, funding was later doubled. A New York ambassador was appointed to promote London’s digital businesses on the US east coast. There have been some hugely successful events such as jobs fair Silicon Milk Roundabout and CityMeetsTech, which aims to get investors from the city’s banking sector interested in startups.
With last week's tax breaks, a recently announced entrepreneur visa, entrepreneur relief and the 'Patent Box, introducing a lower 10 per cent tax on profits from UK or European patents, the government has further lightened its touch on entrepreneurship for the industry.
It’s also now likely that Google’s move will spur on the other tech giants, including Cisco, Intel and Amazon who have all made pledges to do things around Tech City. Google’s building is one of the first and most concrete of those to emerge and sends a clear message to the world about the wealth of talent and opportunity in the UK technology sphere.