M & A Rainmaker

It is fantastic news that Staffordshire C.C. has decided to invest in Superfast Broadband for the Lichfield and Burntwood area as highlighted in the blog on Lichfield Live here:

http://lichfieldlive.co.uk/2012/04/15/broadband-speed-boost-as-staffordshire-investment-scheme-is-approved/

There’s a good blog here, on Staffordshire IT’s website which describes the sort of improvements that ” Superfast Broadband ” can bring to Internet speeds:

http://www.staffordshireit.co.uk/fibre-broadband/

This whole idea of improving the internet infrastructure complements my own thoughts on the promotion of ” Silicon Crossroads ” ( as I have dubbed it ). ” Silicon Something ” has become a global brandname for a High Tech. area. Probably the most famous is ” Silicon Valley ” in California in the United States. Here in the U.K. we have ” Silicon Roundabout ” ( London ), ” Silicon Fen ” ( Cambridge ) and Silicon Glen ( Scotland ) to name a few. The Irish refer to the whole country as ” Silicon Ireland ” or the ” Silicon Republic “. Well, the Irish are probably one of the most successful European nations to take advantage of the development and expansion of High Tech. companies out of the U.S. and into Europe.

Whilst we hear a lot about High Tech. companies being located in London actually these are mainly relatively small ” sales offices ” and the bulk of the administration and development people are located in Ireland and perhaps Belgium or Luxembourg for “tax” reasons.

One thing is for sure: High Tech. companies in Silicon Valley are beginning to struggle to find the talent that they need. They have to look to other parts of the U.S. and abroad to find that talent. In a recent conversation that I had with a Silicon Valley based C.E.O. of a High Tech. startup he said that he would be looking across the U.S. to where his ” alma mater ” ( his old University ) was based and also to Argentina.

High Tech. startup  http://hootsuite.com/ recently highlighted that what had initially appeared to be a negative factor in their startup profile ( to venture capitalists and angels ) – being based in Vancouver – had turned out to be a blessing in disguise because they were able to find hot local talent at bargain prices and that talent didn’t want to go anywhere else.

Silicon Valley took a long time ( 30-50 years ? ) to get to where it is today. Arguably the preeminent startup location in all the world. Talent runs deep in Silicon Valley as this blog highlights:

http://medriscoll.com/post/9117396231/the-guild-of-silicon-valley

The software engineers that are ACTUALLY building the products that we now know about over here – Google, Apple, Facebook, Twitter etc etc are a secretive bunch and their wants and needs are probably different to a lot of people’s.

Internet ( communications ) infrastructure is going to be high up on their list though – from work AND from home AND in between.

According to this blog:

http://www.santaclaraweekly.com/2012/Issue-16/the_right_stuff_santa_clara_infrastructure_foundation_for_todays_stadium.html

The ” Holy Trinity ” that set Santa Clara to be the right location for High Tech. growth was:

“Gillmor calls that infrastructure the city’s “holy trinity of success:” city-owned land and electricity, and strategic use of redevelopment funding.”

More specifically what made Santa Clara such a great location was the road infrastructure; the electrical power strategy and the general utility provision  ( electric transmission, water and sewer lines – to be built in advance of development ). This when combined with a financial strategy ( bonds being sold to finance development which increased in value dramatically after developers built ) led to Silicon Valleys success.

The story of Silicon Valley is a blueprint for success for Silicon Crossroads. Many of the component parts are already in place and Superfast Broadband is another one of those key infrastructure pieces.

High Tech. Start-up’s are booming in the U.S. with Boston, New York and Silicon Valley all very active and there are many U.S. start-up’s looking at establishing a European office. Could Lichfield a.k.a. Silicon Crossroads in Staffordshire dare to dream that it might host some of these start-up’s ?

Friends of mine established Leap the Pond some years ago in order to assist start-up’s gain a successful foothold from the U.S. to the U.K. and vice versa and also from Asia to the U.K. and America and vice versa.

A while back I wrote this blog

http://mandarainmaker.co.uk/wordpress/2011/09/27/celtic-tiger-awakes-and-starts-tweeting-about-hi-tech/

as I was asked to suggest a suitable European location for a U.S. software company that I knew.

Right at the end you will see mention of an accounting practice called the ” Double Irish and a Dutch Sandwich ” fully described here

http://www.joe.ie/news-politics/current-affairs/irish-move-to-save-twitter-53-per-cent-in-tax-0016130-1

which describes the tax savings achieved by Google and to be achieved by Twitter by having offices in Southern Ireland and Luxembourg.

Like it or not the ” financial parameters ” are going to have a significant influence on where a foreign company bases itself in Europe.

Lichfield can do no better than London in influencing the tax position of the U.K. mainland. The so called ” Silicon Roundabout ” in London will have to put up with U.k. Tax laws although it is interesting to note that Google also has offices in London and is taking more space in Silicon Roundabout:

http://www.bbc.co.uk/news/technology-15088359

Recognised ” High Tech. ” areas in the U.K. include: London, M4 corridor, Cambridge, Oxford and Silicon Glen, Scotland. There has been an effort to make the M42/M5 corridor High Tech. and also Telford hosts a number of High Tech. companies.

When you look at Europe from the U.S. you probably have a different perspective and London, Luxembourg, Belgium, Holland and Barcelona in Spain all seem to figure high in Americans minds.

I.D.A. Ireland ( now known as the ” Silicon Republic ” !! ) is very active in the U.S. with ” salespeople ” based in Boston, New York and the West Coast yet it does not necessarily get considered despite having many high tech companies based there.

http://www.idaireland.com/

This video by the C.E.O. of IDA Ireland spells out a lot of the criteria

http://www.idaireland.com/news-media/videos/index.xml?bclid=66038357001&bctid=1148962666001

The Tax Environment

The Business offer ( Incentives to base your H.Q. there )

The Talent Pool

The Track Record

Proximity to other ” synergistic ”  businesses.

Transport links

Despite very tough economics in Ireland, or perhaps because of it, I.D.A. Ireland has got all it’s ducks in a row and does a massively professional job of getting inward investment.

Lichfield has to live with the tax regime, as does London.

The business offer would have to be very good.

The Talent Pool, whilst small is there.

It has little track record and not many existing businesses to be synergistic with. There is however a talent pool skilled in web design and S.E.O.

It has fabulous transport links.

It is a beautiful location, great lifestyle and has an opportunity with the ” Saxon Hoard ” to become much better known around the world.

With a lot of work and commitment Lichfield could become a High Tech base.

N.B. This post in the Guardian about The Lichfield Blog

http://www.guardian.co.uk/media/greenslade/2010/nov/22/hyperlocal-media-blogging

shows the depth of the social media knowledge in the area.

Information about Tech City, London : http://www.ukti.gov.uk/investintheuk/sectoropportunities/ict/item/124866.html