Can east London's Silicon Roundabout help Britain out of the economic crisis?
Editor's note: In Business explores what's behind the flurry of entrepreneurial web-based businesses siting themselves near an east London roundabout which has led to the area being dubbed Silicon Roundabout in a clear nod to Silicon Valley. BBC journalist Mike Wendling considers if these hungry, go-getting entrepreneurs might help lead Britain out of its economic gloom
Is the future of British business in and around Old Street roundabout?
Not long ago, I went to see a friend's band play in east London.
It was a pretty typical night out in painfully trendy Shoreditch - hanging out in the basement of a strangely unfinished office block, with plenty of not-very-cheap beer and loud music.
Now, this kind of thing might seem tangential to the economic crisis that is gripping, the UK, Europe, and indeed most of the world.
But I mention it in this context because of an interesting new phenomenon. The trendy clubs and art galleries in a shabby neighbourhood in east London seem to be attracting the kind of businesses that could point towards one way out of the economic doldrums.
And so for the past few weeks I've been hanging out in east London with Radio 4's In Business presenter Peter Day, not to find the next big thing in indie rock or modern art, but instead visiting the offices of high-tech businesses, talking to entrepreneurs and those who are backing them.
The people we met love the place. It has cheap rent, great coffee shops, and lots of parties. It attracts highly educated young people with angular eyewear who are willing to work long hours to get in on the ground floor of a great idea.
Elizabeth Varley is one of the Silicon Roundabout evangelists. She set up Techhub in one of the grim blocks nearby. Much more than an office building, it’s a base and meeting space for dozens of tiny companies. For a few hundred pounds a month anyone with an idea can rent a desk and, more importantly, be surrounded by their peers.
Talking to Varley, you get no whiff of the gloom currently drenching the financial pages.
"This area was colonised by artists and designers and independent restaurateurs and shop owners," she says. "There's something very similar between artists, independent bar owners and entrepreneurs. It's about people wanting to do their own thing, and it’s about an atmosphere and a vibe in the area."
What’s happening around Old Street is small, almost petri-dish sized. The government’s Tech City UK initiative estimates that around 1,000 jobs have been created this year because of the east London tech boom. That’s nice, but nothing compared to the 38,000 people who became unemployed across the UK in the three months to June.
And we found there are troubling questions about the sustainability of the sector and its ability to really carve out a niche away from Silicon Valley, USA. There is as of yet no UK equivalent of Google, or Facebook, and no obvious candidate to become one.
But there is something happening in this creative cluster, and it might eventually provide a plan to boost job growth. Despite what the Shoreditch hipsters would like to believe, there’s nothing unique about east London itself, and nothing stopping similar colonies from springing up in, say, Manchester, Glasgow or Sheffield.
Or indeed anywhere with creative, hungry, educated young people – and some decent bands to listen to once the day’s work is done.
Mike Wendling is a BBC Journalist
- In Business is on BBC Radio 4 on on Thursday 8 September at 20:30 BST and Sunday 11 September at 21:30 BST. Or listen via the Radio 4 website or download the programme podcast.
- Mike Wendling 's BBC News Online article: Can 'Silicon Roundabout' challenge Silicon Valley?