Cargo Cults, Artificial Reefs and the East London Tech City | May 16, 2011

Back in November 2010, David Cameron announced plans to turn the Olympic Village in East London into a technology hub to rival Silicon Valley. These type of Grand Plans are great at generating headlines and creating a legacy for all those involved, but how likely are they to succeed? Are we going to inherit a shiny new creative centre in the aftermath of the 2012 Olympics, or will it become just another mediocre science park like the ones clinging to the sides of the M4?

It would seem that successive governments have tried to align themselves with the dream of Silicon Valley, with little success. Back in the late 70s and early 80s I grew up in a town called Bracknell which was supposed to be Europe’s answer to Silicon Valley. It had great transport links, a large business park intended to attract high tech companies, and plenty of social housing for all the staff. Companies like 3M and Panasonic moved in to set up offices, but it never really became more than a administrative centre and distribution hub. In part because the economic and regulatory incentives were’t in place, and in part because it just wasn’t a very nice place to live.

Jump forward to the 90s and it seemed that every region of the UK with more than than a couple of web designers wanted to lay claim to the Silicon label, so we laughingly inherited places like Silicon Glenn, Silicon Fen and our very own Silicon Beach. However if a few large, homogenous tech companies fails to make an ecosystem, a dozen small web design agencies definitely doesn’t.

This time around the government has decided to target the start-up community. “Hey”, they must be saying to themselves, “Silicon Valley has start-ups like Google, Facebook and Twitter. Old Street also has a few start-ups. That must mean that Old Street is like Silicon Valley.” As they say this I picture them leaning back in their Chesterfields, hands clasped behind their heads, feeling awfully smug about the mental leap they’ve just made. Silicon Vally has become short-hand for any and all technology, just as Holliwood has become shorthand for the movie industry.

Of course, the idea that East London in any way resembles Silicon Valley shows a distinct lack of understanding about our industry. However it is incredibly flattering that the government are starting to wake up to the importance of the UK tech sector. In a recent report it was suggested that the UK Internet economy contributed 7.2% to the gross domestic product back in 2009, making it the fifth largest sector in the UK, and just two points behind the financial sector. While many other sectors have been struggling, the Internet has been booming.

The cynic in me may attribute this newfound interest in the web as simply a PR opportunity for the government. A way of aligning themselves with a booming part of our economy in the hope of getting some Halo effect. The more practical side of me hopes that the government are really starting to understand the value of the digital economy and invest appropriately. Sadly, while the plans for an East London Tech City are grand, I worry that they are missing the mark.

All Governments have the tendency to think big, and try to solve big problems with big initiatives. Governments also tend to think in a very linear way and don’t often engage in system thinking. As such, there is a certain amount of cargo cultism going on here. The Government understands that big companies like Google and Facebook have big offices in big science parks. So in order to encourage the next generation of UK start-ups they propose building big offices in big science parks. The problem is, I don’t believe that lack of 5,000 square foot offices in East London is necessarily the thing holding the Old Street start-up community back from global domination.

An East London Tech City may well encourage Google to expand or Facebook to set up a significant outpost in the UK. Especially if they get the kind of tax breaks other countries like the Republic of Ireland have giving in the past. However if these new offices are going to be anything less than administrative and sales centres, the large companies need a mass of highly skilled engineers and designers to populate them. At the moment our current education system is critically failing the technology industry, so the only place to find such people is amongst the very start-ups the government are trying to support. Some start-ups may end up being acquired for talent, but more will probably go out of business as their star developers get poached by Google for twice the market rate. As such, the short term effects of the Tech City could potentially be quite damaging. Like putting a large shark in a tank full of minnows and coming in the next morning, surprised to find that it’s eaten them all.

Rather than building a Cargo Cult technology park in order to summon down the great silvery gods from the sky (or in this case, Palo Alto, Sunnyvale and Mountain View), we need to take a more holistic view of the problem. Instead we need to look at the factors necessary to stimulate and grow an ecosystem. In short we need to create an artificial reef.

One of the fundamental things every marine biologist understands is the need for a nursery; a safe place for young animals to grow and learn, free from major predators. In the marine world this is often the mangrove forests. In the web world it should be the Universities, but is more often than not the small design agencies and in-house web teams. So one of the fundamental things the Government needs to do if they are serious about the digital economy is to protect and replenish these nurseries. So they need to invest in the creation of world class design and technology schools to rival those in the US, while at the same time raising the quality of courses across the board. They also need to make it easier for companies to take on Interns and office juniors, through funding and work experience programs.

When creating an artificial reef, it’s very easy to throw a few concrete blocks in the water in the hope of attracting marine life. However the wrong PH levels in the concrete and animals won’t touch it with a barge pole. Instead, you have to understand the types of habitat particular breeds of animals prefer, and create an environment to suite.

Building an industrial park on the Olympic Site is like building an artificial reef with the wrong PH levels. While some companies may be looking for large building in a big industrial park, that’s not the environment most start-ups are looking for.

Instead creative communities tend to form in areas with low cost, quirky offices in interesting parts of town. They have great independent coffee shops just around the corner, relaxed bars and nice restaurants by up and coming chefs. They have art galleries, independent cinemas and music venues; farmers markets, gastro pubs and small fashion retailers. The also have reasonable transport links and low rents. Places like Shoreditch, Bermondsey and now Dalston in London; Southpark, The Mission and DUMBO in the US.

The above description may sound like a cliché or a stereotype (and I am somewhat over egging the pudding here for effect), but if you want to manufacture a new creative hub on the site of the Olympic city you’d probably be better off funding art spaces and offering free rent to independent coffee shop owners than building a traditional enterprise park. Get your architects to create building of character out of brick and stone, rather than giant warehouse sheds. Focus on office space for small and medium sized companies as well as mega corps, and optimise for walking rather than driving. Take a leaf from Malmo council in Sweden, or the folks in Bristol and set up interesting incubators and arts spaces like Minc and the Watershed. Make sure there is high quality training to teach the new generation of technologists, while ensuring the start-up ideas can the funding and support they need.

In short, don’t try to build a scaled down Cargo Cult version of Silicon Valley. Instead create an environment where people can experiment and ideas can propagate. Not through enterprise parks and business centres but through bars and coffee shops. That’s where innovation really happens.

Posted at May 16, 2011 2:26 PM

Comments

Paul Lloyd said on May 20, 2011 4:39 PM

Great post Andy; I love the analogy you’ve drawn between this and marine biology!

You touched on this a little, but in every grand plan drawn up for a UK version of Silicon Valley, all miss the major contributing factor for why the Valley exists in the first place: Stanford University.

Sadly, it’s easier for governments with their inherent short-termisim to invest in physical edifices of their apparent vision, rather than less tangible outcomes like improved standards in education. However, if public money is going to be invested in infrastructure, spending a little more time to focus on the details like this seems like an opportunity too good to miss.

Techmeetups.com said on May 21, 2011 7:48 PM

It is a double edged sword ! We need the big companies to make big changes to the area and at the same time there is that danger that many of the startups will get ‘corporatised’.
One thing however is that startups will always be startups the lure of a big payday or independence to do your own thing will always be attractive for many.
Even in Silicon Valley you have the biggest of sharks and smallest of startups co-existing so maybe that’s not such a bad thing after all.

Alexandre Corda said on May 22, 2011 1:47 PM

Great post Andy.

I think your comparison between building an artificial reef and building an “artificial” Silicon Valley was very helpful to understand your point of view and I must say I do agree with you.

I am quite curious of what you think about the New York tech environment. The decision of Mayor Bloomberg to hire Rachel Sterne as the City’s Digital Officer. She just unveiled a road map for the coming year, explaining the strategy of the city including the implementation of a Stanford campus on Roosevelt Island to prevent this lack of highly qualified engineers.

Some of the propositions will also be very useful for all New Yorkers with an aim of creating the most efficient 311 by crowd sourcing the information.

Again, great post!

Phil Moehring said on May 23, 2011 9:32 PM

Nice one, Andy. I really like the analogy to reefs and letting the young grow, and I am hopeful that the current sleepiness in M&A and financing in the UK tech sector will force companies to grow on real terms, and not on radioactive fertiliser.
(Count that as my own lame attempt at metaphors)

Mark Stringer said on May 26, 2011 1:46 PM

We have a “Natural” technology hub in Cambridge, which didn’t grow around an artificial reef, it grew around a gnarled and very nerdy mediaeval university.

My experience of working in Hoxton was that that was very much a natural reef that grew out of art schools (although the schools themselves were elsewhere in London, Hoxton Shoreditch is a kind of downstream sandbank).

So at the same time as Cameron is dumbly trying to fake technology hubs with his “cargo cult,” he’s making the real techno reefs less likely by forcing many “poor” people (i.e. those without trust funds) to give up on the idea of going away to university, or indeed, going at all…

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Martin Eriksson said on June 1, 2011 8:07 AM

While I don’t disagree with the point about the education system I think overall this is a little simplistic.

The thing everyone forgets about Silicon Valley is that its not just about the valley - it’s about San Francisco/SOMA as well. To your marine analogy San Francisco is like the remora to the valley’s shark.

If we can start thinking about the government’s new fangled East Tech City as the valley to Shoreditch’s SOMA then I think it can only be a good thing. Initially the big corporates coming in will be american but the overall ecosystem will still benefit. The more experienced entrepreneurs, designers, coders (and product managers!) we can get the more the ecosystem thrives.

This is because the real secret sauce to a Silicon X is the alumni effect. Just look at the second and third generation start ups being created by ex googlers, paypallers etc. This flow of money (from successful exits) and talent back into the start up pool is the real key to success that we so desperately need here.