Silicon Valley Shoreditch - really?


David Cameron spoke about the progress being made in turning east London into a technology hub to rival Silicon Valley

East London is getting a lot of love today. The prime minister has visited Tech City, the ill-defined area that is home to a cluster of new media, design and software start-ups, and pronounced it a roaring success.

It is a year since David Cameron unveiled the plan to put the spotlight on east London, and in particular the area around the Old Street roundabout, and turn it into something that would have Silicon Valley looking nervously over its shoulder.

Here's what he said in a speech in November 2010 about his government's ambitions for Tech City:

"Our ambition is to bring together the creativity and energy of Shoreditch and the incredible possibilities of the Olympic Park to help make east London one of the world's great technology centres."

Today on a visit to a couple of start-up spaces, White Bear Yard and the Trampery, he met some of the companies that are trying to make it happen. There were claims of spectacular growth and announcements from big firms like Cisco and Qualcomm of their plans for East London. But perhaps most impressive was something quite simple - a map.

Charles Armstrong has put the map together

Charles Armstrong, whose Trampoline Systems software business has been in the area since the dim and distant days of 2003, is the man who got the Tech City map off the ground.

The mapping project plots more than 600 companies across the area and the links between them. It shows there is a pretty dense cluster around that legenday Silicon Roundabout, but plenty more firms spreading out across east London. Mind you, little evidence yet that Stratford, home of the Olympics, is turning into a hi-tech hub.

I went to White Bear Yard the day before the prime minister and was impressed by the buzz around the place. The international innovation business Ideo occupies one floor and also acts as a fairy godmother to start-ups occupying a desk or two elsewhere in the building.

And you cannot fail to be impressed by start-ups like GoSquared, a web analytics business started by four young men when they were doing their GCSEs. Even now they look barely old enough to be out of school, let alone running a business, but they are symptomatic of a new spirit of enterprise not just in Tech City but across the UK.

Ideo's founder Tim Brown, a Brit who made it big in Silicon Valley, is spending a few months in his London office and seems intoxicated by the sense of excitement here.

In some ways, he told me, it's simpler to get things off the ground here than in California, because it's a much smaller cluster: "There's a real energy about the place, and the scale of it sometimes makes it easier."

But hang on a minute - there are still some big question marks over whether Tech City can really bear the weight of expectation placed upon it by a government desperate for signs of economic growth.

And if small can be beautiful, it also means it will be a long time before Tech City makes any noticeable impact on the economy. Most of the firms there employ just a handful of people. And while their numbers may have tripled in the last year, the unemployment rate in Hackney - where most are based - has continued to rise.

The other question that continues to be asked elsewhere in the UK is - why London? There are other places, notably Cambridge, where you are far more likely to find real technology firms employing substantial numbers and operating on a global scale.

Still, Tech City and its inhabitants seem delighted to be in the spotlight and encouraged by the fact that the government has put them there.

All they have got to do now is prove that small ideas springing out of lofts in Clerkenwell and studios in Shoreditch can produce big companies that make the world sit up and take notice.

Rory Cellan-Jones Article written by Rory Cellan-Jones Rory Cellan-Jones Technology correspondent

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  • rate this

    Comment number 51.

    @ SMT

    That is why I posted a correction about three posts below.

  • rate this

    Comment number 50.

    Tech City has to provide jobs for local people.Hackney does has an untapped pool of talent - they just need to be given the opportunity. Because you're from the wrong postcode doesn't mean you don't have the talent. What's needed is a social mobility programme like in the USA. That's why local social enterprise Renaisi and Hackney College are creating one. Look out for it.

  • rate this

    Comment number 49.

    @William Palmer

    Silicon Valley and MIT are quite a distance form each other.

  • rate this

    Comment number 48.

    As a Londoner who regularly has to battle into town on public transport hell, I too question the sense of why several million people converge into only 1 or 2 sq miles every day. The internet should have freed us of the need to do that! As for the government "putting them there", weren't many small firms already there, and the government simply latched onto what was already happening?

  • rate this

    Comment number 47.

    In the md-80's, I worked in "Silicon Alley" at the other end of Shoreditch along Whitechapel Road (because of Queen Mary College). It disappeared without trace.

    London can't emulate the Bay Area because our VCs aren't prepared to let a hundred companies fail so that one can really take off. And our staff are even less suited to that mindset! Call me when a politician has an answer to that.


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