Capital can be fintech world leader if stars align
Edinburgh’s future success hinges on collaboration across government and business, writes Miller Mathieson, MD, CBRE Scotland and Northern Ireland
Edinburgh has a fascinating history and an extremely bright future. Under the gaze of the world-famous skyline that earned it the accolade of the “Athens of the North”, the city is alive with the buzz of our business community, the promise of our 97,000-strong student population and the sheer vibrancy of our cultural scene. For all that is said about tradition in Edinburgh, it is the city’s ability to innovate and adapt that will shape its future prosperity.
The overriding driver behind Edinburgh’s continued success is that it is a city where people want to live and work. It has long attracted and retained a highly skilled workforce for traditional sectors, but is now showing that the same is true for creative, technology-driven disciplines – and it has future-proofed itself in the process.
The city’s prospects are being directed by the success of companies such as Codebase. As the UK’S largest incubator, Codebase is home to more than 100 of the country’s best tech businesses and made its name as Europe’s fastest-growing tech company in the process. Skyscanner and Fanduel, two unicorns of the sector, both trace their roots back to Codebase.
In terms of what would expedite its own expansion, the Codebase team is likely to have looked for three drivers: a thriving student population; angel investment; and a destination in which people want to live and work. It is therefore little wonder the firm set its sights on Edinburgh when it first opened its doors back in 2014.
CBRE’S latest research, Our Cities, also calls out three consistent factors that make a successful city: innovation, culture and governance. In the capital, we need look no further than the buildings that line our streets to see the city’s knack for innovation. However, it is the very topography that contributes so much to Edinburgh’s charm which could impede its growth.
Our walls are rigid, and accommodation is limited and unaffordable to many. The added protection afforded by Edinburgh’s Unesco World Heritage status bolsters the natural constrains of our boundaries, further densifying the city and capping capacity in a way that jars with the principles of urban progression. This is where the industry needs to step up and think laterally to find a solution.
These confines are felt far beyond our local community. Edinburgh has forged a world-class reputation for the diversity and calibre of our culture. From the Edinburgh Festival and Fringe, to Hogmanay and our thriving sporting calendar, there’s plenty to entice the four million tourists who visit the city each year. It has been noted that the Fringe sells more tickets than both the Olympics and the World Cup. But this comes at a price. Edinburgh is straining under the demands of its residents alone and this sporadic influx of visitors poses immense pressure on our infrastructure – which, naysayers might protest, is too much for the city to bear.
As a country, Scotland is thriving. Our universities are world renowned and we retain many of our students after graduation. Gross domestic product per capita continues to grow, contrary to the mild dip recorded in the UK last year. Business is booming in Glasgow and Aberdeen has brushed itself down from the 2014 oil crash, with many oil and services players operating healthy profits.
Edinburgh itself, however, has a supremacy that runs deeper: this is a connected city with a global outlook. The Scottish and UK governments are an undisputable source of support to our economies and businesses, which Edinburgh has optimised to unlock local business potential and forge our niche in data technology. As a result, we truly hold our own in the global business arena.
Ironically, the biggest obstacles that stand in the way of our success will be of our own making. The dynamics between local and national government are complex and fraught, and the heated question of independence has been further stoked by Brexit. We also have a complex planning system which could be made even more difficult by the Planning (Scotland) Bill currently working its way through the legislative process.
But it’s vital that we do not get distracted by geopolitical factors over which we have no control if we are to retain Edinburgh’s standing – in Scotland, in the UK and on the international stage. While technology and innovation are key, the city also retains its position as the UK’S leading financial services centre after London. More than 35,000 people work in Edinburgh’s financial services sector. Edinburgh’s reputation as an emerging technology cluster and its mature strength in financial services mean the city is poised to become one of the world’s top ten fintech hubs.
The future’s bright. But how bright it will transpire to be depends on whether the many stars that are charting Edinburgh’s destiny can align, and work together for the collective good of this great city.