London is in the crosshairs of inward investment chiefs in Birmingham as the city makes a play to attract digital roles out of the capital.
Marketing Birmingham is targeting more high tech jobs in the capital to move to the city after recent successes with the likes of Asos and Deutsche Bank.
This comes as research from YouGov shows London is too crowded and expensive for emerging technology firms to survive and over half say they are struggling to stay in business.
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In the past year, property rents in London’s Shoreditch tech heartland have soared by 46 per cent and researchers say soaring costs and a struggle to hold onto affordable office space is hampering growth.
Marketing Birmingham plans to capitalise with a guerilla campaign in Shoreditch highlighting the benefits of a move to the second city.
Chief executive Neil Rami told the Post: “The fact that the Government has made so much of Tech City is laudable from a national positioning perspective, but the reality is that’s not a particularly strong offer to grow and develop a business.
“If the aspiration is to get the next Google or Microsoft from Tech City, then the research shows it is going to be pretty difficult to get a scalable business from there.
“They can grow more quickly here – Asos is an example of that. They have been able to recruit people with specialist skills, including language skills, very quickly.”
The digital sector is a major focus for the city’s growth plans.
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There are currently 6,099 tech firms in Birmingham, employing 38,300 people and delivering £768 million to the regional economy.
The likes of social marketing firm Owned it, gifts business tinyme and Comux, which is operating the local television broadcasting platform, are among the recent success stories.
Meanwhile, the new data shows the vacancy rate in the capital – a measure of available office space – has plummeted to a low of five per cent, the worst level since before the financial crash.
Four in 10 small tech firms say they have missed out on new business or grown more slowly than anticipated because of the struggle to convert a start-up to an established business in the capital, researchers say.
The Post reported earlier this month that Deutsche Bank is set to create 2,000 jobs in the city as part of plans to shift some operations out of the capital, and there are several other high profile schemes on the anvil.
Mr Rami added: “We chose about 18 months ago to be aggressive in Greater London, largely in financial services, digital media and life sciences, or the healthcare sector more generally.
“We are seeing a lot of activity in these areas, and the message is beginning to get through.
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“The Deutsche Bank story is becoming well-known in the city of London. What is very interesting is effectively they moved junior roles from India to Birmingham four or five years ago, but now we are talking about major roles.
“Deutsche Bank has shown how you can grow a business here. That is a real proposition for Birmingham – and we are seeing that in digital media – ecommerce and gaming particularly.”
Digital start-up Owned it began life operating out of the founder’s bedroom in London.
When the business started to expand, they took the decision to move out of the Capital.
Finance director Sonu Bubna said: “I am certain now that if we had stayed in London, we would not have survived. It was simply too expensive. We have been able to grow in Birmingham thanks to brilliant local graduates and plenty of financial support.
“When we left London, we thought it would just be a temporary move; but Birmingham was so cost effective that we stayed and haven’t looked back. There’s no reason why digital companies should have to locate in London.
“The digital infrastructure is just as good in other cities, and places like Birmingham are developing buzzing communities of tech entrepreneurs to rival the Tech City scene.”