A shortage of skilled staff and a lack of funding is stunting the growth of Tech City in east London, according to research.
The ‘Tech City Futures’ report, produced by research company GfK, surveyed over 140 senior executives based out of Tech City.
Nearly half (44 percent) said a shortage of skilled workers is the biggest challenge they face, and 77 percent said the problem was restricting their growth.
A third (33 percent) said a lack of access to capital is hindering their business. A similar number (29 percent) said that as a consequence their company is "missing significant business opportunities to expand".
There were also mixed feelings about the effectiveness of government backing. While some initiatives have gained widespread support among Tech City executives, others have been criticised for an emphasis on what some perceive as "PR as opposed to helping develop Tech City’s infrastructure".
“This report highlights the ecosystem of entrepreneurship and how vitally important it is to have all the elements in place,” said Ryan Garner, research director at GfK.
Garner said: "Over 8 percent of Britain’s GDP comes from tech, and that is expected to rise to 12 percent by 2016. Our research shows Tech City is at a tipping point, hopefully the research will help it find its way in spearheading that economic growth.”
The research highlighted that the majority of Tech City businesses have vacancies they can’t fill. The top five skills most in demand are coders and developers, marketing and PR, business development, web design and user experience specialists.
Coders and developers, followed by user experience specialists and research and development staff are the most difficult to recruit, the research showed.
However, it’s not just recruitment but staff retention that is a challenge. Tech City firms have recruited six people on average over the past year. But further growth is hindered because much of that activity has been to replace talent previously lost, rather than to create new jobs to support business expansion.
The report found that 42 percent of Tech City businesses find it "somewhat, or very difficult" to retain their best talent.
This skills gap is being plugged by temporary resources, including freelancers and interns. Almost all (94 percent) of the business leaders interviewed say they use temporary staff in their business, but only 17 percent prefer to do so.
Worringly, almost a fifth (19 percent) said they were making people redundant - linked to a lack of funding - which will be worrying to the government, considering the amount of PR it has created around Tech City through the backing of prime minister David Cameron and Tory mayor Boris Johnson.
Some critics of Tech City say that there is too much government focus on a relatively small area of east London, when there are other regions, such as Cambridge, that are also creating jobs in the UK technology sector.
The GfK report has been published ahead of this week's Digital Shoreditch Festival, Tech City's annual business networking and promotional shindig.
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