This article was published in the Autumn 2017 edition of the European Business Magazine.
Edinburgh is a city of contrasts. Scotland’s capital since the 15th Century, and home to the Scottish Enlightenment, the city’s Old and New Towns combine to create a UNESCO World Heritage Site and one of the most beautiful cityscapes in the world. Yet this is a thriving, ambitious and forward-looking city, rapidly establishing itself as a technology start-up hot bed and one of the world’s fastest growing fintech hubs.
It might be anachronistic, but the historic beating heart of ‘The Athens of the North’ is pumping a modern lifeblood of entrepreneurialism and innovation in the 21st Century. A growing population and unrivalled quality of life complement a proud track record in academic excellence, world-class research and the UK’s highest qualified workforce to create an appealing destination for investors, businesses, international visitors and new residents.
The most prosperous UK city outside of London, with lower unemployment and higher disposable income, as well as the second highest GVA in the UK, Edinburgh packs a powerful economic punch for its compact size.
According to 2017 research by Expert Market, Edinburgh was named best city in the UK in which to launch a business start-up. The research reflected several key factors, including the survival rates of local businesses, workforce availability, transport links, and the affordability of commercial rental properties. The findings support those of European Business Magazine, which named Edinburgh the best European city for technology businesses to locate to, in 2016.
With a cost base approximately 30% lower than London, the availability of quality, well located de-furbished office space has proved particularly irresistible to the Technology, Media and Telecommunications (TMT) sector in recent years.
Home to one of Europe’s fastest growing tech sectors, and the UK’s largest tech incubator at CodeBase, Edinburgh is successfully leveraging its wealth of graduate talent and renowned assets in the technologies of tomorrow. The University of Edinburgh’s acclaimed School of Informatics helps to position the city at the forefront of disruptive sectors such as data science and digital health.
Entrepreneurial Spark, now the world’s largest equity-free, non-sectoral business accelerator, announced in 2017 that it was to expand its Edinburgh hatchery to create a dedicated fintech accelerator at the global headquarters of the Royal Bank of Scotland. Among the most prized of its many accolades in the past couple of years was being named British Entrepreneurial City of the year at the 2016 Great British Entrepreneurial Awards.
Innovation and fresh bold thinking have clearly found an ideal climate in Scotland and appear to be feeding a second Enlightenment. Building on the phenomenal success of tech unicorns such as Skyscanner requires the right atmosphere, as well as access to capital and talent, quality of life and an established entrepreneurial ecosystem.
A vision greater than the sum of its parts
As the second largest financial services centre in the UK – by a long way – Edinburgh already enjoys an established reputation as an internationally important financial hub. Scale, experience, diversity and compactness remain key to the city’s financial offer; an offer that is rapidly evolving to embrace new technology and the global transformation in open banking standards.
A new entrant in Deloitte’s Connecting Global FinTech: Interim Hub Review 2017, Edinburgh has its sights firmly set on becoming one of the world’s top ten fintech hubs in the near future.
The rapid expansion of, and increased international investment in, Edinburgh’s TMT sector continues to catalyse investment in digital infrastructure, all with the aim of meeting the demands of an increasingly technology-focused and knowledge-led economy. Today’s smart cities must be futureproofed to meet consumers’ exponentially-expanding appetites for digital connectivity.
As the UK’s largest Gigabit city, Edinburgh already benefits from an extensive 150km gigabit-capable fibre optic network. Increasing numbers of businesses, as well as every school, library and Council-run site, are connected to the fibre network, which delivers data speeds of up to 40Gbps.
The expansion of Edinburgh’s financial and professional services foundation into a strong technology and fintech focus underlines the city’s agility and adaptability – a fact recognised by international investors.
Scotland’s capital ranked as one of the world’s top cities for investment in the latest JLL Investment Intensity Index 2017. The index, which compares the volume of direct real estate investment in 150 cities, over a three-year period, places Edinburgh behind only Oslo, London and Munich. Edinburgh topped the global chart when it came to investment intensity in the hotels sector.
Edinburgh’s young, highly skilled workforce, world-class universities and high quality of life, prove an alluring combination for international investment funds. Edinburgh St James, one of the largest regeneration projects currently underway in the UK, is being delivered by TH Real Estate, in partnership with Dutch pension asset manager, APG. The development will deliver more than 158,000m2 of prime city centre retail and leisure space, as well as high end residential. Artisan Real Estate Investors are also embracing the modern principles of effective place-making with its Edinburgh New Waverley development.
The business, formed by a consortium of South African and Isle of Man-based investors, has made substantial progress on delivering 17,700m2 of modern office space overlooking a new public square and linked to the city’s historic Royal Mile. New Waverley was recently selected by Her Majesty’s Revenue and Customs (HMRC) as the home of its new headquarters function, which will centralise 2,900 jobs in Edinburgh’s historic Old Town.
A driver for regional growth
Helping to unlock Edinburgh’s vast potential is a considerable infrastructure investment programme that is already benefiting the entire city region economy. The recent opening of the Queensferry Crossing signalled the successful culmination of the biggest infrastructure project in Scotland for a generation. The bridge itself is the keystone of a major investment that has also delivered 13.7 miles (22km) of major motorway upgrades to the north and south of the crossing.
Just a few miles away, Edinburgh Airport – Scotland’s busiest international gateway – handles more than 12.3m passengers annually and connects to more than 130 destinations around the globe. The airport has just begun a new £80m expansion that will deliver new boarding gates and seating areas as part of a £220m million masterplan to meet rising passenger numbers.
Further investment in infrastructure has been unlocked with the 2017 announcement of a new £1.1bn Edinburgh and South-East Scotland city deal, following agreement between the UK and Scottish Governments, six local authorities and regional partners. The deal, which is expected to generate more than £5bn worth of Gross Value Added (GVA) over the next 15 years, includes commitments to invest £300m in world-leading data innovation centres, upgrades to the Edinburgh city bypass, a new £20m world-class concert hall for the city and £65m of funding for housing, to help unlock key development sites.
Edinburgh attracts more than 4m international visitors every year, enhanced by a year-round festival offering, culminating in August with the largest arts festival in the world.
It’s thanks to its broad appeal that Edinburgh has emerged as one of the UK’s fastest growing cities. The city will host the Eurocities Conference 2018, which brings together local governments from more than 130 of Europe’s largest cities. Next year’s conference, entitled Creative, Competitive Cities: Culture as a Smart Investment for the Future will explore the role of culture and talent in driving inclusive sustainable growth in vibrant innovative cites. There could be no better host for such a topic than the home of the world’s largest annual arts festival.
Edinburgh is open for business. It nurtures and supports ideas. Its beauty is beyond question (Rough Guide readers recently named Scotland’s capital the fourth most beautiful city in the world behind Paris, Florence and Rome). It’s a compact, affordable and green city, full of parks and vistas that inspire and relax in equal measure - What are you waiting for?