I’ve written before about the failure to create a Silicon Brighton, despite both a vibrant community and significant investment. While the whole country has tried for years to create technology innovation clusters, the most successful example is “Silicon Roundabout”.
The name Silicon Roundabout came from a jokey tweet by Matt Biddulph (who formerly worked at Dopplr and Moo), back in July 2008: “Silicon Roundabout: the ever-growing community of fun startups in London’s Old Street area“. This off-hand tweet led to a small flurry of press, as well as an article in Wired UK.
Enough time has passed that there are in depth reports on Silicon Roundabout (from the LSE’s Center for Economic Performance), and Wired UK has even published an obituary.
As Max Nathan, one of the LSE report writers, summarised on Twitter, “David Cameron launched the Tech City programme in 2010 to ‘accelerate’ the Shoreditch cluster – using place branding, business support, networking, tax breaks and a new delivery agency. By 2014, Mayor of London Boris Johnson was hailing it a huge success.”
That Tech City programme occurred significantly after the Silicon Roundabout Cluster had been identified. Nathan questioned whether the Cameron intervention had any significant effect: “Instead of catalysing the cluster, policy generally rode the wave.” (ref). The discussion on twitter concludes:
Where does this leave us? None of this takes away from the real and impressive growth in London’s overall tech ecosystem… However ~ this work challenges the backstory. Many of the big claims made for the Tech City programme in East London don’t really stack up. And in the paper I find some evidence of negative side effects – for example, spatial disruption and movement within cluster space…. On the one hand, it’s impressive that a tactical, light-touch, cheap programme like this had any impact. Though I’m not sure this approach would work outside London.
Wired’s obituary also looks at the way in which the Silicon Roundabout ended up as “a real estate nightmare”. Low rents were one fo the attractions of the area, but the branding had an effect on this. The article admits that :
the Silicon Roundabout cluster is still there – and it is bigger than ever. Ironically fulfilling Cameron’s prophecy, it has crawled all the way east, as people ran away from rising property prices. In merely spatial terms – how big the cluster has grown – the policy has been a success
But:
With many more firms scrambling to move near the famed Old Street roundabout and rents duly skyrocketing – the initial benefits of the cluster vanished. Many companies, especially pure tech startups ended up being overwhelmed and closing shop; others left very quickly; the environment overheated and churn accelerated, destroying any semblance of a stable network of cooperation. “For digital tech firm productivity, I find suggestive evidence of a negative policy effect,” Nathan’s paper reads. “This suggests that policy weakened the net benefits of cluster location.”
What does this mean for Brighton? We’ve had several Silicon Initiatives and the Digital catapult. Why are we not a ‘Tech City’? The story of Silicon Roundabout suggests that policy interventions are not going to help as much as we think.