Analysis: Big fish circle Silicon Roundabout’s minnows

East London’s Tech City started out as a hub for technology start-ups, but recently the likes of Google, Amazon and Facebook have invested in the area. Their arrival, said Mayor of London Boris Johnson, “propels [the UK] well up the league table of global tech cities”, but what will it mean for all the fledgling tech firms that have made the area around Old Street their home in recent months?

The Big Three are open about their desire to poach the right talent, and understandably, many start-ups are not exactly delighted.

The managing director of Amazon’s London office recently told Computing that the firm chose the area as it is a “hotbed of tech talent”. Facebook, meanwhile, said that London was a “perfect fit” partly due to the wealth of “great technical talent”.

Before this invasion by Amazon and Facebook, Chris Downs, co-founder of business information resource levelbusiness.com, told Computing that by moving to Tech City, corporate giants would kill the booming start-up industry.

“When I hear conversations about bringing Facebook and Google innovation quarters to the area, I worry it would make [the area] something very different,” he said. “It would be the land of big corporates, not the start-up corner. They’ll force the prices up and we’ll have to go somewhere else.”

His fears were confirmed by Daisuke Kobayashi, country manager of Japanese social mobile gaming company GREE, another large firm setting up a tech hub in East London.

“The cost is second to the location,” he said. “We’re trying to relocate [our business] in the best place of the city. In Tokyo, we have the office in Ropponggi where we are in the same building as Google and Goldman Sachs, and in London, Tech City is the best place to recruit talent.

“There are so many companies in the industry in that area, it is easy for us to meet and recruit people. For potential candidates, it’s easy for them to join because we are close to the location they are working in,” Kobayashi added.

But the Japanese firm is not just looking to hire from start-ups; it is also looking at recruiting staff from larger corporations within the area.

“As long as they’re good talent we don’t care,” Kobayashi said.

Up to 100 positions are up for grabs at the Japanese organisation, which currently has only 20 staff based in the UK. Half of the roles are in engineering, including iPhone and Android developers, while those with business intelligence skills are also in demand.