Silicon Valley was not built in a day

 
Marc Sidwell
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DAVID Cameron has announced his vision for an “East London tech city – a hub that stretches from Shoreditch and Old Street to the Olympic Park”. Cisco is signed up to establish a supporting innovation centre, and McKinsey and Qualcomm are promising advice on strategy and intellectual property issues, but can a package of new policies really build a rival to Silicon Valley in the Lee Valley?

Creative clusters certainly drive innovation, with ideas feeding off one another, as Steven Johnson shows in his new book, Where Good Ideas Come From. And government does have an important role to play in creating the sort of attractive policy environment in which such entrepreneurial clusters form. We asked three experts to analyse some of the new proposals below, which seem to be mostly positive.

And yet much of what makes such clusters thrive is cultural and out of government’s reach. The weak ties stressed by sociologist Mark Granovetter in a classic 1973 paper develop in a grown community that develops trust and identity over time. The success of the so-called Silicon Roundabout area around Old Street, with 700 per cent growth in tech start-ups based there in just three years, comes precisely from its unplanned, organic nature. The creative class are attracted not only by the work opportunities but by that authentic community and its accompanying buzz, the sort of “street level culture” identified by US academic Richard Florida. Cameron hopes to bring all this to the Lee Valley, yet the unique atmosphere will not easily be replicated with any speed in the new Olympic Park miles further out of town.

But Cameron’s decision is driven as much by short-term, politicised motives as good sense. Faced with the looming need to build a legacy for the 2012 Olympics, it is not surprising he passed over “Silicon Fen” in Cambridge, which already has links with a world-class university, giants like ARM, Autonomy and CSR and hundreds of start-ups, in favour of dragging the magic of Silicon Roundabout further east. But trying to transplant this success story away from its cultural niche runs the risk of killing everything that makes it special.

POLICY ANALYSIS | ENTREPRENEUR VISAS; MORE OPEN GOVERNMENT IT PROCUREMENT; AND INTELLECTUAL PROPERTY REFORM

Anne Morris
Principal, Davidson Morris Solicitors

The Tier 1 (Entrepreneur) visa already allows anyone with access to £200,000 in capital to come to the UK to start a business. For the new entrepreneur visa it is proposed the business be vetted and capital provided by a leading investor. This may discourage less-connected yet equally talented entrepreneurs. The devil will be in the detail: we look forward to seeing how the government can attract real talent without turning the immigration process into an episode of Dragons’ Den.

Dominique Lazanski
Technology Policy Analyst, Taxpayers’ Alliance

It is great the government is opening up its procurement process to smaller and newer businesses who focus on open source development. Large companies shouldn’t be guaranteed big IT contracts by back room deals. But in many cases, IT contracts should be outsourced altogether. SMEs are better equipped to provide solutions in a cheaper and more innovative way than the government – whether that be online tax payments or digital health record management.

Alec van Gelder
Project Director, International Policy Network

Intellectual property protection has been a cornerstone of US growth in Boston, Nashville and Silicon Valley. Each specialised in arts and technology-intensive work but became powerhouses as their policy environments drew investors, which appealed to more start-ups. The virtuous cycle of technology, innovation and growth can be replicated in London’s East End or anywhere else. That means getting the policy environment right and letting the entrepreneurs do the rest.

POLICY BREAKDOWN | EAST LONDON TECH CITY

Reform copyright laws to include “fair use” clauses, so that entrepreneurs may use content more easily.

Create an entrepreneur visa that would bypass any migrant cap. To qualify, the entrepreneur needs financial backing.

Make government IT procurement more open to small businesses.

Attract major tech firms to attract even more talent. Google will move a UK office there, and Intel will build a research lab nearby.

Connect Silicon Roundabout to the Olympic Park, where Cisco will establish an innovation centre.
Thomas Hamed

IN FOCUS | SILICON ROUNDABOUT

Silicon Roundabout is centred on Old Street roundabout, just north of the City. While major tech companies are now moving in, the area hosts almost 100 start-ups. The social music site Last.FM, acquired by CBS in 2007 for £140m, began here.

Silicon Roundabout sits between the City, Hackney and Shoreditch. The area benefits from the City’s financial services, transit links, and excellent telecommunications.

Unlike most tech centres, the area is not tied to a university. Boosters also hope the area’s reputation for artistic creativity attracts investors, much like quality-of-life attracted people to Silicon Valley.
Thomas Hamed