Old Street Roundabout, the centre of East London's tech community. Photo: flickr@D1v1d

The IT community at East London’s ‘Silicon Roundabout’ has welcomed Google’s decision to aquire a seven-storey building in the area to support digital entrepreneurs.

The internet giant’s new building will offer space to technology entrepreneurs, developers, start-ups and organise hackathons, lectures, workshops and product demonstrations.

The building, currently undergoing refurbishment, is located in Bonhill Street and is due to open next year. Its lease will run for at least 10 years.  Google UK’s headquarters will remain in their current offices in Victoria.

The roundabout, at the junction of Old Street and City Road in Shoreditch, has become known as ‘Silicon Roundabout‘ because of the concentration of digitally related businesses in the area. David Singleton, Google UK’s Engineering Director said the area had a huge potential for economic growth and the creation of lots of new jobs.

Edward Baker of Education Games Network, a web company based in Hoxton, welcomed Google’s decision as “a seal of approval”. “I think it’s a fantastic thing for the community,” he said. Although he  sees the new building as invigorating for the current “ecosystem” he is not sure it will attract more venture capital to the area.

Juan Alvarez, CEO and founder of Amplicate sees Google’s plans as a vindication of their efforts. “It will definitely validate what’s happening here, but that’s not enough,” he says. “It’s a good start but what we need is not more events but more entrepreneurs and companies moving here.”

Nadav Poraz of WhoSampled is also highlighting all the knowledge Google can bring to the tech community: “Google and Facebook are at the heart of almost everything that’s happening on the internet right now, so it’s very important for web start-ups to work closely with Google.”

Eric Van Der Kleij, CEO of the Tech City Investment Organisation, the body set up to promote the initiative, said: “Google is a terrific example of a major technology business that understands the importance of nurturing as well as benefiting from the communities where they operate.”

Google is not the only big corporation investing in a community that so far numbers about 300 web-based companies. After BT, Virgin Business Media recently also got involved by offering THECUBE free use of a carrier-grade 1Gb/s internet access point for a year. Nearby Tech Hub, where lots of start-ups share the same space, is also supported by Google, media group Pearson and software firm BlueVia.

The Government sees the area as crucial. Talking about about the future of East London’s IT community last November, David Cameron said: “Help to create the right framework, so it’s easier for new companies to start up, for venture capital firms to invest, for innovations to flourish, for businesses to grow.”