The internet of things (IoT) has long been regarded as the next big development in the technology world.
By creating a network of physical objects that are embedded within electronics, software, sensors and connectivity, a higher-value service can be provided. One example is intelligent shopping systems, which will monitor specific users’ purchasing habits in a store by tracking mobile phones and then offer them suggestions based on their spending patterns.
According to research by TechNavio, the IoT market is going to increase at a compound annual growth rate of 31.72 per cent from 2014-2019, while Gartner forecasts there will be nearly 26 billion devices part of the IoT by 2020.
This demonstrates just how big IoT is set to be, but why is London such a good location for start-ups in this field?
Thousands of tech specialists have already decided to move to London so they can be part of this burgeoning corridor. Set up with the backing of the government, the Tech City cluster in Central and East London is described as the “best place to start and grow a digital business” in the UK. A perfect example of this is the £1m Internet Of Things Launchpad competition, which was launched last year. This saw seven start-ups share the fund to help boost their long-term plans, while business support is also being provided by EE, Seedcamp, Cisco and Hive. Among the projects recognised are plans for internet connected batteries and a scheme to improve cycle journeys in London and Cambridge.
London’s airports provide a gateway to Europe, as every major city in the continent can be reached by direct flights. Indeed, Heathrow Airport is actually the third busiest in the world, dealing with 73 million passengers in 2014. This will be particularly appealing to US companies that are looking to set up a European base so they can boost their global market share. London also boasts excellent transport links to the rest of England and Scotland, while the development of the HS2 rail line will see journey times to cities like Manchester and Glasgow reduced even further.
A proven track record
London has long been associated with giving digital entrepreneurs the tools they need to be successful. There has also been a rapid increase in the number of start-ups, which has coincided with growth in the number of digital skills on offer too. This track record makes it easier for start-ups when they are looking to set up, as they can be confident the right conditions are present for running a successful company. The facts speak for themselves – the digital sector in London grew by 16.6 per cent between 2009 and 2012, while 27 per cent of all job growth in London now comes from the digital sector. If you are a digital start-up, the city is the place to be.
Access to finance
Start-ups are only as good as their financial backing, and London is ahead of the game in this field too. Figures from London & Partners show that digital start-ups secured $682 million (£611 million) in venture funding during the first three months of 2015, which represents a year-on-year increase of 66 per cent. This demonstrates how fledgling technology companies in London are being able to access finance. Indeed, many commentators believe the city is now the best in Europe when it comes to attracting funding. “London is one of the most electrifying tech hubs in the world, with companies and investors all brought here by the city’s ideas and entrepreneurial spirit, as well as its talent and access to markets,” said London technology ambassador Eileen Burbidge.
A strong IoT community
The growing IoT scene in London is helping to forge its reputation as a global tech leader. A number of groups and bodies have already been set up to provide forums for discussion about product development and strategy. For example, IOT/LDN has over 5,000 members, while the Internet of Things World Forum has been held in the city. Internet of Things London and The Business of IoT also give highly-skilled professionals the perfect platform for debating their ideas and developing their networks. Sherry Coutu, a well-known entrepreneur and investor, is clear about the city’s qualities. “London has shown that it can produce exceptional companies that grow to scale quickly and become significant players on the international stage,” she stated.