Tech City – rhetoric and romance

Digging beneath the rhetoric

There’s plenty of rhetoric about the strength of Tech City and, actually, no shortage of data: Graeme Evans, now a Professor of Design at Brunel, kicked-off the recent Creative Breakfast session on Tech City, giving an overview of data he collected while Director of the Cities Institute at London Metropolitan University. Graeme’s data highlighted the fact that the growth of digital businesses in and around Shoreditch and Old Street was part of a growing trend – both geographical and industrial. The industrial trend was towards a new kind of business, blending ‘creative’ and ‘technology’ businesses which are not easily quantified using traditional data-collection methods, but where data does suggest a very strong agglomeration in East London – a phenomenon which has been progressing over recent years. The geographical element is twofold: a drift east from Soho and Clerkenwell towards cheaper properties in the City Fringe; and the fact that this ‘agglomeration’ is part of a bigger London creative and digital cluster which has a strong focus centrally and west of London, as well as here in the East.

The Breakfast Group spent the morning doing its own fieldwork, visiting a number of businesses and agencies, traversing east to west – from Mother and Ostmodern in Redchurch Street to Mother at the Trampery and City University in St John Street, via Berg, MakeShift, Google Campus and TechHub in Bonhill Street: a triangular journey which took in around 10 businesses. A snapshot, but a fairly full and intensive one.

It’s real

It’s clear that the Tech City rhetoric is not just hot air. As one of the participants put it: “Clearly there is something real happening, neither just hype nor a flash in the pan. Undeniably impressive.”

The agglomeration of businesses represents a significant new cluster. And the new blend of creative and technical was very evident – sometimes in the form of collaborations across sectors – for example Mother, an established advertising agency, hosting the MiniBar meet up of small digital businesses and ‘geeks’; or, more frequently, start-ups and some established businesses deliberately exploiting the mix of skills from different sectors, to create new cross-over businesses with new, sometimes as-yet unclear, business models. It was notable for example, that businesses talked about the need for a combination of design and making skills, drawing on London’s strength in both. And, as another participant put it, drawing on “London’s pre-existing status as a global leader in sectors including advertising, TV & film, publishing etc – a leadership which provides a foundation, along with plentiful supply of graduates from art colleges as well as more conventional graduates, to mix into the cement.”

That mix of skills is one of a number of factors which have helped to fuel this growth:

• New technology providing new working models, the need for new applications, economies of scale.
• Cheap, open, office-space
• Shoreditch at the heart of an buzzing East (and North, and South) London.
• There has also been a lot of money coming from China and India, despite the economic slow-down in the West.

What of the challenges?

We identified a few:
* Getting products to what feels like it is a buyer’s market, with thousands, millions of applications and ideas to choose from. The risks are they fail, or sell out to somebody with a pre-existing brand/distribution channel, and it gets smothered…..
* Business model:  It was not always clear what the new business model for many of these start-ups would be. And the tendency towards complacency was very noticeable: “there was an was an odd unwillingness among the funky start-ups, and start-up-site managers, to acknowledge the major role of corporate ‘welfare’ as well as public sector support… There is already a new techcity ‘mythology’ – we must have heard at least 3 times that they were ‘the first to offer space here to digital start-ups’”
* Workspace: not enough and, inevitably, getting more expensive.

Richard Holt summed it up thus:
“There will be a range of outcomes, from the very successful at one end to those who fail and end up doing something very different. The danger is that too high a proportion are too ruthlessly weeded out.  The point here is that the sector depends on a critical mass of companies and players, sufficiently numerous to provide the networks and connections and innovations. Most of these, by definition, won’t do hugely well, but they will still be important to the success of the whole project. So most (not all) of the less successful enterprises need to be able to tick along, earning enough to make it worth the effort, to act as sub-contractors to the others, to inject ideas into the mix, to offer specialist skills, and also to keep the coffee shops and bars buzzing and the romances blooming.”

For Tech City to survive, thrive and grow, it will require the support and intervention of a range of partners – public and private. As Stian Westlake has noted recently, there has already been a move against complete de-regulation of the market, with local authorities successfully resisting Government attempts to loosen planning regulations which would encourage more residential property in an area crying out for cheap studio and work space.

At the same time, others have noted the need for a smart approach to planning – which retains some of the distinctiveness of the current environment – with its mix of uses and activities, rather than lots of shiny new office space. And it’s also worth placing residential property into this mix (notwithstanding the point made above), given the often prohibitive cost of housing in London. As one of the group put it: “What’s the point in working in Shoreditch if you have to commute to the last stop on the tube and then take a bus to get home to an overpriced bedsit?”

Where’s the romance in that?