Creating Tech City

Our Future Digital Economy: If You Build It, Will They Come?

18:30-19:30, 24th October 2011, Imperial College Business School

Blog by Sherry Morris and Andrew Fletcher

The second of four Tech City Talks, hosted by Imperial College Business School and the Guardian’s Tech Weekly team focused on whether Government intervention in Tech City / Silicon Roundabout have been beneficial, and how it fits with other clusters and interventions.

Asked if Tech City was simply a brand to attract investment or whether the Government wants to invest in companies on the ground, Eric Pickles, secretary of state for communities and local government, made it clear direct government investment in companies would be the ‘kiss of death.’ He wants to see Tech City as a means for cities to join up globally.

He summarised one approach being used to support the development of clusters: enterprise zones. By using key interventions such as tax incentives, access to superfast broadband and local development orders, start up companies can get the push they need to develop and grow. The development orders being key to prevent the zones simply being used by companies to transfer existing jobs around the country. When asked to define what Tech City is, he pointed to three of four thriving sites around London where ‘techies’ and start-up companies can gather and feed off each other to develop new products, ideas and services.

Alex Deschamps-Sonsino, founder and CEO of Designswarm and co-founder of Tinker London and part of the Really Interesting Group, picked out other factors that led to the rise of Tech City, with the single biggest factor aiding growth being the expansion of the East London line. She also stressed the importance of small companies co-existing with large companies and providing support to help them develop. But the support needed in a company of 1-10 employees is radically different from that needed for 100 employees, even though both are classed as SMEs. She wants specific, targeted support for these ‘micro-companies’, so they, too, can get off the ground and grow, rather than be left to struggle along on their own.

Eric Van Der Kleij, CEO of Tech City Investment Organisation, argued that Silicon Roundabout is thriving since the spotlight was thrown on it by government a year ago, citing growth from 200 to 500 start-ups. Activities such as Silicon Milk Roundabout also clearly demonstrate the paid opportunities that these start-ups are generating for graduates. However, Alex pointed to the difficulties in measurement because of the difficulty in distinguishing what is a tech business, what is a creative business or what is something else.

Regardless of the numbers in the clusters, Tara Solesbury, a digital media and creative industries consultant, drawing on experiences from Wired Sussex, pointed out the importance of the clusters occurring naturally and within the local community. In her experience, only clusters that formed organically thrived, the rest died out.  She welcomed the development of more ‘tech cities’ around the country.

It was suggested that perhaps with all these numerous start-ups clusters we are in the midst of a new bubble. But Elizabeth Varley, CEO of Tech Hub, argued ‘no.’ The resurgence of tech and entrepreneurship in London is not a bubble, causing ill-considered investment in businesses, but a genuine increase in the considered investment in companies. Austere times are causing this resurgence of entrepreneurial activity, and a change of mentality to ‘if you don’t have a job, make yourself one.’

Asked if there was a need to focus on cities, rather than ‘Tech Rural’ Alex argued that being located remotely is possible, but inevitably travel will be required as the business grows and engages with larger communities. For a small percentage of businesses, clients remain local, but the majority need to set off and expand.

A recurring theme from Eric Pickles was the need for government to avoid meddling wherever possible and helping to create the right environments, through mechanisms such as enterprise zones, rather than using regulation. His hope is that these thriving clusters link up and work together not just within the UK, but worldwide, emphasising the part that cloud computing can play in helping individual clusters to collectively grow into something much bigger, outweighing the importance of the ‘vibe’ in any one particular area. In Tech City we are embodying the ‘build it and they will come attitude’

The series of talks continue next Monday at Imperial College Business School. For more information and to register:

You can listen to the podcast of this week’s event here.

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