September 28, 2011 12:01 am

Google plans ‘East London Tech City’ base

Google is to open a “launchpad” for technology entrepreneurs in a multimillion-pound boost for the government’s “East London Tech City” scheme.

The investment in David Cameron’s growth initiative comes after Twitter’s decision to locate a new office in Dublin raised fresh questions over hopes that US technology groups can help stimulate the UK economy.

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First announced last November amid a wave of optimism over the “Silicon Roundabout” scene around London’s Old Street and Shoreditch, many entrepreneurs felt the East London Tech City initiative had lost momentum. But Google’s investment ranks among the largest in a fresh flurry of announcements from the likes of Facebook, Amazon.com and Intel.

Google, whose main UK offices are in London’s Victoria, is taking out a long lease on a 25,000 sq ft, seven-storey building in Bonhill Street, which it is planning to refurbish before reopening next year.

David Singleton, engineering director at Google UK, said the initiative was a first for the company. “East London is already home to hundreds of innovative British start-ups, and has huge potential for economic growth and new jobs over the coming years,” he said.

Google’s lease, which was advertised for £5m, will run for at least 10 years. The location will be used for speakers, collaborative programming events known as hackathons, training workshops and product demonstrations for engineers.

Rohan Silva, a senior policy adviser to the prime minister, said: “The Google announcement is a great example of how we are using the convening power of government to bring investment to the area,

“This is addressing a very specific need that the community in east London has made clear to government: the need for more flexible spaces where entrepreneurs, engineers and developers can come together and work on things in an ultra-low-cost way.”

Mr Silva said the second phase of the government’s growth review, which will be published in November, will include a revamp of the school IT curriculum, after Eric Schmidt, Google’s chairman, criticised the UK’s poor technological education system.

Earlier this month, Facebook, BlackBerry-maker RIM, Intel, Cisco and Techlightenment announced a package of new IT training courses for young people in London and around the country.

On Monday, Amazon announced a free weekly “start-up clinic”, hosted in east London, as well as training courses on “cloud computing” for 120 small companies in London and Manchester. Werner Vogels, Amazon’s chief technology officer, said start-up activity in London and across Europe was “100 per cent comparable” with Silicon Valley in terms of the talent and quality of businesses, although there remained disadvantages, such as access to early-stage capital.

As the UK government looks to position London as Europe’s tech capital, it faces tough competition from Dublin, whose lower corporation tax rate has attracted Facebook, Google and this week Twitter to open offices.

Twitter denied reports that Dublin would be its international headquarters and noted that, for now, the sales and operations office would be smaller than its central London and Tokyo sites.

“As we continue to expand overseas, we’re constantly evaluating the best structure for the company,” said Twitter. “We looked at different factors including available labour force, proximity to customers, IT infrastructure and related operational expenses when choosing these locations.”

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