David Cameron today set out a vision of London’s East End becoming a hi-tech rival to Silicon Valley on the US west coast, disclosing Google (NSDQ: GOOG), Facebook and a host of cutting-edge firms have committed to invest in the Olympic Park.
In a speech today, the prime minister announced that he is introducing a new entrepreneurial visa as well as allowing more intra-company transfers – moves that will blow a hole in his plan for an immigration cap.
Cameron also disclosed that he will look at a potentially far-reaching change to intellectual property rights after Google told him UK laws are far more restrictive than the US.
The prime minister said he is determined to create the right environment for the thriving start-ups already flourishing in London’s Old Street and Shoreditch areas to grow into multimillion pound global businesses.
He said: “Silicon Valley is the leading place in the world for hi-tech growth and innovation. But there’s no reason why it has to be so predominant.
“Our ambition is to bring together the creativity and energy of Shoreditch and the incredible possibilities of the Olympic Park to help make east London one of the world’s great technology centres.”
Cameron’s team, in a round of meetings with hi-tech firms and venture capitalists, has won support for his vision.
Google, Facebook, Intel (NSDQ: INTC) and McKinsey & Co are among the companies that will commit to invest in the future of the area. Google had told him the company could not have been formed in the UK.
He said: “The service they provide depends on taking a snapshot of all the content on the internet at any one time and they feel our copyright system is not as friendly to this sort of innovation as it is in the United States.
“Over there, they have what are called ‘fair-use’ provisions, which some people believe gives companies more breathing space to create new products and services.”
In the two main commitments to east London, Google will create an Innovation Hub for its researchers to come together with developers and academics to create the next generation of applications and services. Facebook will create a permanent home for its Developer Garage programme, which brings together the most talented UK developers and entrepreneurs.
Cameron’s decision on intra-company transfers will mean that employees of multinationals who move to work in British branches, potentially numbering in their thousands, will be exempt from the permanent immigration cap to be introduced in April. Out of the 36,490 skilled workers who came to Britain from outside Europe last year, 22,000 came on intra-company transfers. More than half of the ICT visas went to three Indian IT companies and the British IT industry has been pressing for them to be included in the cap. The largest single group of unemployed graduates is in IT.
The decision follows fierce lobbying by big employers including Nissan, Toyota and Honda who threatened to close UK plants if they cannot move staff freely.
The announcement is thought to be the result of a deal between the business secretary, Vince Cable, who wanted a more flexible cap, and the home secretary, Theresa May. UK Border Agency officials have been concerned that the route has been used, particularly by Indian IT companies, to undercut British graduate salaries.
Cameron was lobbied by the Indian government on the issue during his recent visit.
The decision means it will be harder for the government to get net migration – 196,000 last year – down to the “tens of thousands” promised by the next general election.
Home Office sources said the formula leaves the door open for a limit to be placed on intra-company transfers outside the formal immigration cap. One option is to limit the visas to 12 months – which would have blocked all but 6,000 of last year’s arrivals. Another option is to require a minimum salary of £45,000 which would also curb numbers.
This article originally appeared in MediaGuardian.