Silicon rebrand: Is Tech City still the next big thing?
In November 2010, David Cameron announced that government policies would turn Britain into the most attractive place in the world to start and invest in tech companies. More than three years later, has Tech City really become the next big thing? We spoke to two web companies in East London
As part of the government’s programme to create new jobs in the country, Tech City was, like East London with the Olympics, a way to rebrand the aging Old Street Roundabout and rejuvenate a neighborhood plagued with one of the highest unemployment rates in the country. The government’s plan was not only designed to attract successful Californian companies, but also to support the UK web economy:
Right now, Silicon Valley is the leading place in the world for high-tech growth and innovation. But there’s no reason why it has to be so predominant. 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 (David Cameron’s speech to high tech business leaders and entrepreneurs in East London, 4th November 2010).
In 2012, Cameron renewed his commitment to turn an ugly roundabout into a thriving area of British creativity, announcing a £50m investment in the area, relying on the fact that great successful tech companies such as Microsoft and IBM had officially announced their arrival in town, while also making use of the post-Olympic London hype. Tech City would not only be about attracting brilliant minds from abroad with ‘Entrepreneur Visas’ and more flexible intellectual property policies, but also about encouraging domestic productivity.
The government went about this in a number of ways. Joanna Shields, former European head of Facebook was appointed CEO of the government’s brand new Tech City Investment Organisation (TCIO). A little way down the road, policies such as the Future Fifty programme were implemented: in April of 2013, TCIO – since renamed as Tech City UK – announced its project to support the UK’s most promising technology companies and to help them expand on the British markets (providing them with a concierge service, advice from venture capital investors, specialists from leading law and accounting firms, etc).
As of last December, the 50 lucky companies were named and some have already been complaining about Tech City UK’s questionable start and lack of communication. More than three years after David Cameron’s daring announcement, how is Tech City actually doing?
- Watch “Tech City UK – Welcome to Europe’s Fastest Growing Tech Cluster”, Tech City UK’s official video presentation
When asked about the general evolution of the area, Sarah Wood, co-founder and COO of Unruly Media (a social video marketing company and one of the Future Fifty), is rather optimistic:
“We’re hugely supportive of any efforts to establish London as the global centre for the new digital economy. Whether they come from the Government or from the business sector, we welcome that […] Joanna Shields has done an awesome job in the last 12 months since her tenure at the top, to promote the businesses that are already in the area – home-grown businesses – and we support any initiatives that support home-grown businesses grow to the next level,” Sarah Wood, co-founder and COO of Unruly Media
Nevertheless, concerns remain that this public investment is mainly relying on an ephemeral hype surrounding the area. Kieran O’Neill, co-founder and CEO of Thread (a Shoreditch web-service company helping its users to choose and buy clothes), believes that:
“Politicians always get involved in hot things like what’s happening here but rarely follow through […] The general cheerleading, while not essential, is no doubt helpful for making people consider startups for their next career move. That said, I believe almost all of the growth that’s happened in the London tech scene over the last few years would have happened without Tech City being formed. It was a snowball already rolling down a steep hill,” Kieran O’Neill, CEO of Thread.com
Cameron’s speech focused on building a UK rival to the acclaimed Silicon Valley in East London, but Wood disagrees with the approach: “If I was going to compare something to Silicon Valley, I’d be comparing the whole tech belt, which includes Cambridge [which has a strong history of hi-tech, although according to some this already belongs to the past], London, Reading, Oxford, and other European cities, like Paris.“
According to Woods, the competition with the highly ‘mythologised’ Silicon Valley is unnecessary and Tech City should not only be about tech business expansion in the UK but also be a way to “make sure the tech community is integrated into the rest of the community”.
In the face of concerns about the costs of running a successful business in London, the UK’s own Silicon Roundabout could produce ‘the next Facebook’, according to both entrepreneurs. O’Neill believes that East London “can and will have a Facebook-sized exit. The issue is companies like that only come along occasionally, and as there are far more startups in the US than the UK, the probability is most will be in the US.”
Despite occasional success stories such as Wonga and King.com, this appears to be the main reason why initiatives around Tech City UK seem essential to the future of Europe’s leading tech hub. “It takes a team to do that, and not just the team within a company, that means the press, peers, and advocates all pulling together to really take companies to the next level,” says Wood.
While a key part of the attempt to turn East London into a viable tech hub at the international level, private initiatives such as Unruly’s involvement with City University London’s Cass Business School, may not be sufficient and it seems that a true tech business culture is still to be built in London, together with public support.