UK government announce their answer to Silicon Valley [Live at LeWeb '11]

Eric Van der Kleij the CEO of Tech City Investment Organisation (a government body in the UK) made an announcement at LeWeb this morning, that could possibly see the UK launch its answer to Silicon Valley, or at least the beginning of it. He revealed plans for the UK government to launch what they’re calling (working title) ‘Global Entrepreneurs Network’ (GEN). Though plans for the initiative are not yet finalised, Eric explained that the idea was to bring together 5 leading entrepreneurs from different cities and clusters, for example from the UK & France, and bring them together to collaborate and innovate, with support from the government. Though the official launch date has not yet been released, as the details of the initiative are being worked on, it shows an interesting approach that sees governments working together to try and compete with Silicon Valley.

“Entrepreneurs Collaborate, Governments Compete”

On stage with Eric, was the advisor for new media to President Sarkozy – Nicolas Princen. He supported the initiative, based on the idea that typically entrepreneurs will collaborate with each other, which is the opposite of the way governments function, inevitably competing with each other. GEN aims to change the way that governments function with each other, specifically to foster collaboration and scalability of companies. GEN will support the participating entrepreneurs by enabling them to scale up through supporting national and international networks.

The need for Europe’s answer to Silicon Valley has dominated many of the talks at LeWeb, with Eric Schmidt in particular discussing the potential for this. He claimed that Silicon Valley needed a competitor and it’s through government initiatives such as this that it is likely to be achieved.

Government Support

Both Eric and Nicolas discussed government’s plans to support entrepreneurship and startups. Nicolas revealed new initiatives announced, such as an aggressive tax system which will see new startups pay little tax in the first 4 years, before moving onto higher tax payments later, to support early growth. Importantly though, the French government is looking at support beyond finance and towards the raw material that entrepreneurs can really use : data. On Monday they announced a new initiative to supply raw data to entrepreneurs that can use it to innovate and create new products.

Similarly the UK government is making big steps in this area. As well as offering research & development tax relief they also announced lifetime capital gains relief. This is an incentive for entrepreneurs to keep 90% of the first £10 million they make when selling their companies, which is a huge incentive. Through this and Tech City (which is being established as London’s new technology hub), the UK government is working to provide a real answer to Silicon Valley and prevent people migrating away to where the action is, which right now isn’t necessarily in Europe. What is needed for this to really work though, is also investment in technology to ensure that Europe, or the UK, has the talent that will help see startups scale.