Snap Inc. shows London remains a startup magnet despite Brexit

Snapchat owner’s move to London highlights UK capital’s unique lure

The news that Snap Inc. is to make London its international headquarters will only add to the triumphalism of the so-called Brexiteers who voted for the UK to leave the European Union. The story is already being hailed as another shred of evidence to boost claims that businesses will not suddenly depart Britain just because we islanders will no longer necessarily possess the previous trading links, access to a single market, or freedom of movement that the EU enshrined. Here, after all, is one of the most feted startups in internet business and it is putting its faith (and, more important, its money) in London. But the truth might be rather more complicated than that.

Firstly, this is London rather than the UK, and although the former is part of the latter the two look increasingly like different worlds. London, for so long a powerful capital dwarfing other UK cities anyway, is flush with banking cash and has become a magnet for the media, creative and tech sectors. The English language makes it a natural destination for US-based enterprises and its polyglot and cosmopolitan culture provides access to smart people from all over the world. Its airports make it relatively easy for Americans and others to visit and, in spite of the Leave vote, and with one eye on the financial epicentre of the City of London, it is still unlikely that the British government will make it more difficult for successful people to come and go pretty well as they please.

Secondly, London is a wildly enjoyable place to live for those with sufficient wealth at their disposal. The combination of a world-leading entertainment, cultural and sports scenes with that all-important shared language for much of the world, makes it a hugely attractive destination for businesses seeking to attract smart people. Labour laws are light-touch when compared to France and even those companies nominally headquartered elsewhere for tax purposes are piling into London properties.

The biggest London lovers, such as Google and Facebook, are effectively creating their own micro-economies. The once grimy and druggy Kings Cross area has become studded with trendy cafes and restaurants; Bloomsbury, Holborn and St Giles have become rebranded as Midtown in an attempt to rebrand areas best known for legal and literary reasons as a faux New York-style, techie, ‘city living’ milieu.

Where the previous generation of tech companies like Oracle and Microsoft made dull, satellite towns on the road to London their UK homes, today’s entrepreneurs want to be close to the action and locate themselves in the heart of the City. Snap Inc. is going to Soho, Pivotal recently opened impressive offices in Shoreditch. Bigger companies keen to add youthful lustre place themselves alongside the vibrant newcomers: Microsoft has bounced around the centre with presences in Soho, Victoria, Paddington and Tech City in east London.

London is not alone in advertising the attractions of a buoyant city to the world. A similar trend in the US sees startups base themselves in San Francisco rather than Silicon Valley. But London’s progress towards becoming a ‘city state’ emulating Singapore is unlikely to be a template for the rest of Britain. Indeed, it has long looked like the exception rather than the rule.


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