Reassurance on London’s post-Brexit status

London maintained its status as Europe’s main technology hub for global investors in the first half of 2017, newly-released figures suggest.

According to London & Partners, the Mayor of London’s promotional agency, despite the UK’s decision to leave the European Union (EU) its capital attracted the lion’s share of venture capital (VC) investment in the six months to June, with global investors pumping more than £1.1bn (US$1.42bn) into London’s tech sector and more than £1.3bn over the UK as a whole.

H1 saw over four times the amount of investment than at the same stage during 2013 and more than any other six-month period in the past decade. Investor appetite for London’s most innovative companies included deals for the virtual reality start-up Improbable (£388m) and London-based fintech companies Funding Circle (£82m), Zopa (£32m) and Monzo (£22m).

London also remained dominant in the European investment landscape, with analysis of the data showing that the city’s tech sector attracted more VC investment than its European rivals since the Brexit vote, including Dublin, Paris and Amsterdam.

With over £1.8bn in VC funding across 544 deals, London secured more than double the amount of investment than Berlin, the second largest city for VC investment, which has attracted £775m in investment and 136 deals since the EU referendum vote.

Investing in the future

Michael Keegan, head of product business at Fujitsu EMEIA, suggests that the UK should focus on upskilling the future generation and embracing smart innovation that betters society.

“The technology sector remains a key source of strength for both the UK and the rest of Europe, but if businesses are to successfully continue to grow and develop they must ensure they invest in the future workforce,” he adds

“The real challenge will be securing your business’ future in the face of a digital skills shortage; nearly a quarter of global businesses say a lack of skills and talent is the main factor preventing them from responding to digital disruption. It will be vital for all European firms to collaborate with educational institutions and governments to build a strong pipeline of digital skills.

“Nurturing and attracting the next generation of talent is an absolute must; part of this is down to ensuring STEM (science, technology, engineering and maths) skills are a focus early on, while providing access to the digital education services required to support ongoing learning later on.

“It’s equally clear that European businesses in the technology sector and beyond must adopt a collaborative approach to stay ahead as the digital pace of change continues to increase. It’ll be fundamental to work with likeminded organisations, by co-creating with partners to invest in technologies like artificial intelligence (AI) and the Internet of Things (IoT) and create new market propositions.

“Finding the perfect mix of human-centric innovation and placing a focus on upskilling the younger generation will be the only way to thrive in the technology driven world that all businesses now inhabit.”

Insurance credentials

Brexit is also unlikely to lead to London’s displacement as Europe’s main insurance centre, says the new deputy chairman at Lloyd’s of London.

Robert Childs, who succeeds Paul Jardine in the position and also serves as chairman of insurance group Hiscox, told business daily City A.M that the UK’s exit from the EU will have structural rather than strategic consequences.

“”Yes, Brexit is important, we have to take it seriously,” he said. “But it doesn’t threaten the long-term strategy of the Lloyd’s market or the London market.”

In March, Lloyd’s announced that it would set up a new European insurance company in the Belgian capital of Brussels as a post-Brexit hub, but outgoing chairman John Nelson insisted that the move will not have a “significant impact” on the way Lloyd’s operates.

Childs also expressed confidence in Lloyd’s ability to survive a challenging marketplace. “In a cyclical business you have to be able to manage all parts of the cycle and we’re certainly not in the up part right now,” he said.

“The thing about evolution is that Lloyd’s has been around since the 17th century. So you could say it has proved it knows how to evolve. And the survivors in evolution are those that have the ability to change. Lloyd’s has changed over the years and has adapted to its environment.”

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