A patch of east London has quickly become a world-class technology hub. Britain’s government has taken an interest; others might too

The gentrified East End is finally getting some attention from The Economist - only 10 years too late.

Wider East London has been a centre of cultural innovation since the 1970s with different music scenes and counter cultures. Even Stratford, technically just beyon the East End, had a proto-arts scene before the Olympics were awarded. To say that creativity in East London beofre gentrification consisted of David Beckham is a bit like saying the King's Road was a country lane before the 1980s.

Some 'innovative' journalism' please!

Litle boys are playing Young Einsteins.

Unlike times of Einstein or Edison or cartoon Meet the Robinsons, success of high technology comes not from invention anymore. Multi-year, extremely capital-demanding tests and refinement and global distribution system are the key.

Everybody in the world is showing young, promising inventions and products. But without drawing in big companies backed by government, hi-tech startups will burn themselves and fail.

The last statement sounds a bit scary and anyway, companies like Facebook and Apple needed an ecosystem in order to grow up and maybe this is what's happening in East London now.

I have to say I am pretty bored of hearing about 'why London isn't Silicon Valley'. Access to finance perhaps isn't as plentiful due to the fact that there are significantly less successful entrepreneurs who have exited and are using their money and expertise gained to help the next generation of entrepreneurs.

Having said that, London has a lot of things going for it that Silicon Valley doesn't, the culture and diversity are important and should help to attract key talent to the city. For many start ups putting together a talented tech team is almost as challenging as finding the money to finance it.

One thing that I believe will help East London be a success is the emergence of places like TechHub (where I am a member), where entrepreneurs can hotdesk and bounce ideas around and learn from the expertise of other entrepreneurs.

The future for East London does feel exciting and maybe it is better to focus not on what isn't, but on what it is, and where it's going!

drummond(at)gocarshare.com

England's Continuing Technological Evolution for Economic Survival
We led in the creation of the industrial Modern World, and created prosperous trade niches, such as Germany exemplifies; now that much of the World has learned the existing technological secrets, it is essential for our survival that we continue our technological evolution.

BTW, similar experiment is running in Russia: Skolkovo high-tech center.

The difference between Skolkovo and East London is strong financial, legal and tax support of russian government

Anyway, East London has more chances to deliver continuously visible tangible products. State support and regulation is not good for innovation.

As with all government funding promises, the devil is in the detail: the intention here seems to be to put in a £200m bid to Round 1 (closing 21st January 2011) of the £1.4bn Regional Growth Fund to co-fund startups with business angels (presumably via matched funding).

However, as I pointed out here...
http://nanodome.wordpress.com/2010/11/05/camerons-blueprint-for-technolo...
...the RGF was set up with a specific, European-sounding regenerative remit: to “help those areas and communities that are currently dependent on the public sector make the transition to sustainable private sector-led growth and prosperity.” And as far as bidders for its rounds go, “while all areas of England are eligible to bid for the RGF some parts of the country, particularly where there is currently high employment low-levels of deprivation and a vibrant private sector, may struggle to demonstrate how they meet the second objective of the fund."

As far as I can see, just about the only practical way the government could square this kind of deprivation-fixing remit with the whole Silicon Roundabout bandwagon would be to declare London a startup finance disaster zone. Which it plainly is right now.

Of course, being this honest would break numerous political rules, not least of which is the time-honoured principle of capital city boosterism. But what are they to do otherwise?

Interesting, important & irritating in about equal measure...

Irritating because there is no silicon in silicon roundabout, and nor does there need to be. This is an important technology cluster, but it is a web (or dot-com) hub, not a chip design one. The comparison of Old Street is less with Silicon Valley than it is with SoMa in San Francisco or parts of New York. For chip design in UK you need to look to Bristol/Bath (with more IC designers than anywhere outside the Bay Area) or Cambridge.

Important because we do need more growth, more high-technology start-ups and more succesful business exits in UK - of all kinds, and in many locations.

But what is critically needed is a solution to funding. Most of the start-ups mentioned here are tiny, and trivial. They employ a few people - and if they do have a good idea then they'll get crushed by better-resourced, bigger operations which can affords more marketing and build scale.

This kind of innovation is necessary but not sufficient. Unless UK can solve the funding problem Graham O'Keefe alludes to, with successfull exits creating returns that encourage people (pension funds etc) to invest in the next generation of start-ups that can grow to scale, then we have a problem.

There was a good seminar on this last week (which did address silicon start-ips), reported in Electronics Weekly:
http://www.electronicsweekly.com/Articles/2010/11/19/49933/business-lead...

Which led on to some further discussion in their blog -- which had the very illuminating title "US VCs euphoric; UK VCs gloomy. Why?"

http://www.electronicsweekly.com/blogs/david-manners-semiconductor-blog/...

1) Why choose to label? Silicon valley cannot even re-create itself, it has one of the highest unemployment rates in the US, so why would we want to recreate this in the UK?

2) East London has a wide variety of innovative entrepreneurs not just techies; there are architects, fashion designers, Marketing and PR firms, engineers, artists, writers, and so on.

4) Why not mention in your report the resources that are already available in East London, which are helping pave the way for innovation, TECH HUB, Truman Brewery, THECUBE London, East London Business Place, Toynbee Hall, Fashion East, just to name a handful.

5) Investment will come in due time once the good ideas rise to the surface. It is naive to think that by just throwing money at the area it will produce great ideas. Great ideas are produced from knowledge resources, and a diverse group of people. Silicon Valley did not set out to be Silicon Valley, it grew at its own pace and then attracted the right people.

I can't really see this as being more than political expediency, based on a pretty thin understanding of what constitutes "tech". Economic policy is full of the unmarked graves of attempts to artificially create these kinds of industry clusters. What we have in East London is a concentration of service businesses, such as agencies and designers, that makes it a very fertile area for a certain kind of small-scale consumer web outfit, as in the examples given above in the comments. This is not a criticism - indeed my own startup, Artswrap, is firmly in this category, and is based in Bow, a rather unfashionable neighbourhood in #techcity.

Silicon Valley on the other hand has a history based in massive US government defence spending going back 60 years, and world-class science-based universities that have had long engagement with commerce. There's a well-established capital ecosystem, with a sophisticated approach to investment and risk. The UK has suffered in comparison, with engineering, pure science and mathematics all being poor relations in the expansion of further education over the last decade. Moreover, UK startups suffer from the same handicap as the British film industry - the US is the largest English-speaking market in the world, and any company lacking a presence there won't be taken seriously.

Aside from the question mark over where the money's going to come from, there's the further question of how it will be distributed. The Olympic project was supposed to deliver a bonanza for local SMEs, but has been a regrettable failure on that score. The Olympic media centre is being built at a reported cost of £355m, and the government are desperate to put something seemingly dynamic in this potential white elephant. Attracting big tech companies with cheap rents might work in the short term, but I'm deeply sceptical as to the longevity of this enterprise without a more thorough approach.

It is worth noting that London (Clapham) was home to one of the first,
most sucessful and enduring tech startups in the early '60s ; Dolby Laboratories was the brainchild of Ray Dolby (who I knew at Cambridge) It started with the first sucessful noise reduction system for audio tape recording. It has expanded into many areas of recording and the logo can be seen world wide.
John Firth , Ottawa,

The "hotel-comparison website" mentioned in the article is http://www.sletoH.com (spell Hotels backwards!). We have been here for 3 years now and have office space in London Met University's Accelerator incubator.

In our building, as with across Shoreditch and Old Street, it's not all high tech. We are one of a handful of technology companies in a crowd of marketing, IT support, PR, fashion, artists, designers, etc. We fully support the Silicon Roundabout initiative but hope that The Govt has a firm handle on what companies are actually here and how best to be involved. A £200M investment would largely be wasted by following the usual process of paying consultants to set up projects to 'support' us. We have got where we are by our own means and are much better equipped to make the most of investment than any external over-priced consultants. Just look at the Shoreditch Trust Digital Bridge initiative: staffed by over-priced consultants and touting big names like Microsoft it quickly burned through all the money and closed down not achieving any of its objectives. Don't do the same again.

benj (at) sletoH.com