Ed Vaizey: Digital Economy Minister Claims UK Needs 'Wall of Money' to Emulate Silicon Valley's Success

The UK needs a "wall of money" from venture capitalists to "turbocharge" companies to emulate the Silicon Valley's success, according to Digital Economy Minister Ed Vaizey.

But the Conservative MP, speaking at a Tech London Advocates event in London, stressed Britain is a great place to start and run a technology business.

"We do [have Silicon Valley in the UK] in the sense that we have clusters and networks and this is a great place to start and run a technology business," the minister said.

"The other 'why can't we be like Silicon Valley?' is money. If you went to the west coast [of the United States] and the Silicon Valley, the only difference there is the venture capital – the wall of money that can go into a company and turbocharge it."

But Russ Shaw, founder of Tech London Advocates and the former vice president of Skype, told IBTimes UK there is a "wall of money" in the UK but some of it needs to be redirected to the technology sector.

"We actually have a wall of money here – we have £700bn ($1,128bn, €885bn) in assets under management in the city," Shaw said.

"That's a pretty significant wall of money. The money is there but [the question is] how do we get it redirected into the technology sector?

"How do we educate technology and general investors about the pros and cons of investing in technology? It's a risky but important area.

"We've got to get investors here to say look we shouldn't push our start-ups to get to profitability at year two or three. Let's get the profitability go out into in the future."

Zoopla and Just East boost investor confidence

Shaw pointed to the "great" commercial exits of the likes of Zoopla, Just Eat and King Digital as some of the deals that have boosted investor confidence in the UK technology sector.

"It doesn't happen overnight – Silicon Valley has been at it for 75 years – we have to keep building that wall of money," Shaw added.

His comments coincide with research from Tech London Advocates that found almost two thirds (64%) of the group's members grade the employability of British computer science graduates as average to poor due to failings in their training.

The study, which surveyed 150 members of the group in October, also found the ongoing talent shortage has left 70% of members believing London does not have the skilled graduates to keep up with the sector's growth.

The group, in light of the research, called on the private sector to work more closely with universities to raise awareness about job opportunities in technology and identify the skills required by the digital community.