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
    +7

    Comment number 11.

    I work in this cluster of companies; the reason it has no effect on Hackney is because none of these companies recruit many local people. Instead, new employees come in from across the UK, Europe, and the world and move to London.

    This is because we need to hire people with real skills, and there is a severe shortage of them in the job market.

  • rate this
    +2

    Comment number 10.

    Well done, now tell me how sustainable this is, and why the hell it is in the arse end of London? Surely after 20 years of the working condition deteriorating and quality of life plumeting for all those but the top 5% earners in our capital, the penny should have dropped by now.

  • rate this
    +2

    Comment number 9.

    Good news! This should mean that the East Europeans should not have to abandon ship in Shoreditch for a little longer. Think of all those offices to service!!!! And all those techies off to Starbucks for their skinny latte at £4 a pop.

  • rate this
    +2

    Comment number 8.

    My question for DC would be:
    "Are you planning to move the GDS (Government Digital Service) To Tech City to take advantage of the available skills and infrastructure?"

  • rate this
    +2

    Comment number 7.

    London is the worse place to start a business. Half of those businesses will fail within five years sadly. There are much cheaper alternatives

  • rate this
    +1

    Comment number 6.

    "...why London?"

    Because you can get there from Westminster, do the photo-op and be back in a couple of hours?

  • rate this
    +1

    Comment number 5.

    Rory can you just write a blog on this topic without deliberatly trying to bait people into a 'London vs the rest of the UK' debate. It just distracts from the conversation.

  • rate this
    -4

    Comment number 4.

    The use of Apple at the BBC has always been based on cost for me with the 30% discount journalists get (other companies can apply).

    What puzzles me is why Tim Muffet gets all the Tech stories but Rory gets the Blog?

  • rate this
    +1

    Comment number 3.

    Two blogs and no mention of Apple? Have you been told to keep off the "A" word after a damning report into how much money the BBC have spent on Apple products despite laying off staff, and how an insider said the BBC resembled an Apple outlet?

  • rate this
    +8

    Comment number 2.

    I'm not expecting this to reduce unemployment in Hackney unless:
    1) Hackney has an untapped pool of IT and Design resource that wont leave and are yet undiscovered, or..
    2) IT and Design professionals move to Hackney, raise house prices and push the locals out.

  • rate this
    +2

    Comment number 1.

    I would also question "why London". With fast broadband access available over pretty much all of the UK now I would have thought it was far easier for start-ups to set up shop outside London where cost will be significantly cheaper. If the Government wanted to push this you cuold have start-up "areas" helping regenerate cities outside the captial and moving there once they've "grown up"

 

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