London's digital economy versus Melbourne: A quick comparison
London is a bustling city and is certainly not for everyone, as this tongue-in-cheek account demonstrates. Its digital scene is vibrant. In fact, Britain’s digital economy contributes the biggest share of GDP of all the G20 nations.
Inner East London is at the centre of this digital economy but the momentum is expanding across the UK. London’s digital economy has survived the global financial crisis and is now growing at a healthy rate.
London and Melbourne’s digital scenes have both grown organically. Universities and large employers haven’t galvanised the community. Therefore, both cities rely on soft infrastructure such as bars, cafes and shared workspaces to build creative groups. Government policy is attempting to expand these clusters.
Skills gaps, finance difficulties, workspace access and cost, connectivity and business growth issues apply to both cities.
A large chunk of the digital scene in London has grown out of traditional advertising, media and design companies. A walk around the city-fringe creative hub of Clerkenwell, my temporary residence, unearths many examples of digital design companies fitted out with expensive furniture. The suburb has more creative businesses and architects per square mile than anywhere on the planet, and many have a digital flavour.
Similarly, the design industry heavily contributes to Melbourne’s (and Australia’s) economy. A walk around inner suburbs Cremorne and Fitzroy provides proof. While quantitative comparisons are difficult due to sector classification issues, anecdotally, the London design scene is bigger and more mature.
Another advantage for London is its financial services heritage. London ranks second compared to Melbourne’s 28th in the Z/Yen Group Global Financial Centres Index report, which ranks the competitiveness of financial centres. This ingrained expertise has allowed ex-bankers to start fintech companies by getting off a few train stops later at Old Street, known as Silicon Roundabout. This ecosystem has given London 10 of the 50 Best FinTech Innovators in 2014. By comparision, Sydney had three, the Gold Coast had one and Melbourne missed out altogether.
Melbourne’s fintech scene is growing; the FinTech Melbourne Startups meetup provides insight into a passionate group. London’s vibrant and diverse digital economy ecosystem will allow continued growth despite some bumps in the digital journey.
Melbourne should try and emulate its successes and avoid its failures.
Paul Winters is a Director at Syntegrity Solutions, a specialist IT consultancy that focuses on digital innovation enablement. He has over 10 years experience in the IT industry and has consulted on APIs, integration and security to enterprises including top-tier banks and insurers.