Ian Dowson shared his research on the Tech City cluster at a recent breakfast discussion, highlighting among other things:
- The scale of new business growth in and around Tech City, nearly matching New York – although still dwarfed by Silicon Valley
- The number of investment and exit deals in London compares well with both NY and Silicon Valley, but the amounts are tiny compared to both: angel investment deals average $1m in California but just a quarter of that in London
- London start-ups illustrate a maturity of development and expertise – driven by multi-national, multi-disciplinary partnerships, with impressive educational and experience credentials
- The Tech City business culture is also marked by strong creative businesses and experience, and a remarkably dynamic and open market-place of meet-ups and knowledge exchange.
This discussion followed the recent visit to Tech City which highlighted the notion of the ‘blended’ business (echoing the concept of the ‘fused’ or ‘superfused’ businesses found in Brighton), but also the pressures on workspace and the general problem around property prices in London.
The way in which creative businesses and others are moving out, on account of rising rents and other pressures, was identified as one of the inevitable by-products of a successful business cluster. Tom Campbell has blogged on that here, and the need for a more sophisticated approach to planning and housing policies was highlighted.
But in answer to the question ‘What have we learnt?’ (or better, ‘what are we learning?’ – since the transformation of the area hasn’t finished yet), a number of intriguing ideas and challenges emerged:
- The relationship between corporate companies and investors and the start-ups and micro-businesses: In one sense, the big companies are key to fueling the profile and success of an area – but to what extent might they damage the energy and dynamism of a start-up culture? Are the corporates ‘providers or parasites’? How does the shift to a big-firm/uni/incubator model for start-ups affect the dynamics of the human capital networks?
- Accelerating the inevitable: Has Government focus and investment on Tech City simply accelerated an inevitable transformation of an area which has been gentrifying over decades? Or has the injection of new money and profile created something more interesting – a unique combination of technology and creativity, which may not have evolved quite so successfully without that focus? Can it be replicated elsewhere in the UK, to catalyse investment and growth, without jeopardising the characteristics of the place which made it attractive to start-ups in the first place?
- And what of cultural and creative institutions themselves? Rather than bemoan the fact that a creative ecology is turning into a tech-cluster – what can cultural and creative agencies and investors do to sustain the creative edge of places like Shoreditch, Hackney Wick, Manchester, Glasgow….?