Newsnight goes sour on Tech City miracle BBC's Newsnight decided to get a reality check on Britain's economic miracle of East London's "Tech City Cluster" on Friday, and asked me if I'd like to contribute. With a hangover and not much sleep the night before? Of course I would. Radio 4's Today and BBC2's Newsnight are invitations you don't turn down if you think you' …
After reading the article, it made me laugh watching on iPlayer. Andrew was much too polite. He was suffering from that British disease (and I for one also suffer from it, badly) of being much more polite in public to the person who, in his head, he is having a wrestling match with than he is in the wrestling match that is happening in his head. It's a very British disease, which in my case has lead me, to recount to my friends imaginary conversations where, in my imagination, I have score hit after hit with witty rapier like blows. But the reality is I was, in actuality, I was probably sitting there rather meekly. Never mind. It was working in the other direction too. If there was friction didn't really come across and Eileen didn't score any blows against Andrew. After reading this piece I expected a boxing match, but relative to that frame, in reality it was two people dancing round each other shadow boxing and not actually trying to land any blows, and then the bell went for the end of the match.
I agree with Andrew re: the real locus of tech in the UK (M4 corridor, Cambridge etc) but I think it is also fair to point out, as a VC she is putting her reputation and money (I'm aware she is investing the money of others, but her own money is very likely to be there as well and certainly will be in terms of time), where her mouth is. Don't dis consumer services. There are many very good businesses based on the service industry. Silicon Roundabout will score many misses, but there only need to be a couple of big hits and it will be worthwhile. And I don't like the class politicking either, there is no "Private Schooled applicants only" clause on any of the grants. If there is a lack of state sector educated applicants, the fault lies with the attitude instilled by the state sector and the likes of the BBC (purveyors of positivity and enterprise inspiring productions like East Enders).
Getting a start-up going is demonstrably more related to attitude than resources, since most don't bring money in from mommey and pappy anyway, and those that do usually fail for the fact, if that is the case, the child usually doesn't know arse from elbow. Grant money is there for people who have taken the steps to set-up an enterprise and anyone who has tried will know relief only and not freebies are given. The risk remains high. We are not talking unconditional "state handout" here. Most attempting a startup are taking a considerable risk and they should be encouraged.
All the examples she gave of so called success involved a small British company being bought by a big American one. Not exactly a great long term plan for the country when the VC culture is all about selling it on rather than building a self contained, long term business that actually adds some proper value.
So, it looks like the world has discovered that Tech City doesn't work. I most recently read about this in a Guardian piece which pointed out some of the flaws in the model, especially the role of ever-increasing rents play in destroying the informal "economies" (for want of a better term) that post-industrial creative destruction seems to require.
Silicon Valley is waved as the poster-child for start-up creation when it is, in fact, a difficult to repeat combination of lots and lots of venture capital and a flexible and highly educated labour pool.
Urban regeneration (in East London) seems to be the pot of gold at the end of the rainbow. Viz. this rather prescient, pre-Nathan Barley article about Hoxton from 2000.
PS. quibble: is the lady called Burbridge or Burbank
PPS. posting something on Twitter and thinking it won't get made public? tsk ;-)
"Silicon Valley is waved as the poster-child for start-up creation when it is, in fact, a difficult to repeat combination of lots and lots of venture capital and a flexible and highly educated labour pool."
People in Scotland will remember the crap spouted about 'Silicon Glen'.
"Silicon Valley is waved as the poster-child for start-up creation when it is, in fact, a difficult to repeat combination of lots and lots of venture capital and a flexible and highly educated labour pool."
Actually a "secrete history" of Silicon Valley starts with the founding of an Electronics depart at the University of California which spun off a lot of companies to do (secret) RF work (I mean 10's of GHz in the 1940's) coupled with changes in the tax laws that meant it was less risky to put more money in start ups.
IOW The chip makers of the late 50's and early 60's (such as the "Fair children" of Fairchild semiconductor) were the second wave of start ups.
"posting something on Twitter and thinking it won't get made public? tsk ;-)"
A lot of people I respect have said that it was daft of me to do that. Even in a closed group. And particularly when I've written about photographers taking stuff off the web - http://www.theregister.co.uk/2013/03/12/err_bill_photo_consequences/ - because they can't protect their work.
But I gave her the benefit of the doubt, reckoning she might have forgotten she was taking something out of a Protected account, and making it public. Only someone looking for a fight refuses to delete a Tweet, after they've been asked *very* nicely. I didn't expect that at all.
btw, I think most of the growth touted for Tech City (26pc) comes from the redefinition of 'tech' to include marketing services, and businesses with 50pc of their business online. Marketing and financial services have rebounded strongly in the last year. But they were there anyway, and have nothing to do with "ye tech cluster".
Silicon Roundabout was alive and well in the age of the minicomputer; the magic of Silicon Roundabout was the same then as now: a refuge from the eye-watering rents of West End fleshpots and the City's iconic buildings.
As to Cameron's brilliant idea that we could go into business with Germany with the Germans doing the proper engineering bit and we doing the comms with the internet, does he really imagine that that would involve a fifty-fifty split of added value, or even that the Germans are not perfectly capable of doing their own internet thingy if they seriously think an intelligent fridge was a marketable commodity?
One has to suppose that for Cameron, the fact that Rolls-Royce monitors the vital organs of their turbo-props in operation and transmits the data back to Derby via satellite is hopelessly low-tech compared with an intelligent toaster or fridge for a twerp like Dave.
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Out of 39.
That's a phenomenal success rate.
Or total BS.
'll let readers decide that one.
Sadly Orlwoski has a great face for radio. :( . Shades of one of Mark Gatiss's characters in The League of Gentlemen.
Which is a pity because a lot of his comments were correct. Let me suggest the real problem is that UK companies (with very few exceptions) goal is to get adequately successful to be bought by someone bigger/richer/more successful and (probably) foreign.
Put simply it's a failure of UK management and/or their VC backers
They don't have the balls to say to bigger/richer/ corp "No we're not selling out to you, (eventually) we want to buy you."
Hoxton is probably fine for a media orientated startup, but bugger all use when you try and scale. If you want to grow a company (rather than just try and flog some IP to Google) you need space, reasonable rates and parking. You'll find successful British IT companies in all sorts of odd places - often on edge of town business parks in places like Guildford, Ealing, etc, etc. There are usually roundabouts involved, particularly if you're based near Basingstoke...
Well, I have worked for 4 software / consulting companies (in approx 30 years, haven't moved round much) and every one has been sold to an American company in the end, the most recent because there was some easily fixable problems, but a competitor came up with an unsolicited bid and the money enabled the parent company to invest in the pride and joy of its CEO, his property empire.
So it goes.
I was wondering what happened to Demis Hassabis – a child prodigy whose name seemed to be everywhere for a while. "Theme Park" (Bullfrog) and "Republic: The Revolution" (Elixir) were some of the games he was responsible for.
Interesting that he's gotten into much the same field as Jeff Hawkins. Shame his company was bought up by Google as that only goes to support Orlowski's (and my) view of the "Silicon Roundabout" hype.
As one who has grown up here, I've seen it all. Things come and go, but there are LOTS of garages here and lost of people willing to try things. It is pretty convenient to be able to go down to Fry's (it used to be Zack Electronics in Palo Alto) and pick up the pieces needed to make up something. It must be in the water or the air that things sprout up here. Sure things and people move around as well as being bought and sold, but that's the way it is.
Then again, in my experience, the faltering of a company doesn't have to do with its ideas, but rather with its management. It is the people in the suits that hold the string of the Yo-Yo and make it go up and down. If they don't get it right, things are doomed. If they do get it right, everybody wins. It is the classic MBA vs. EE problem.
So, life goes on. It really doesn't matter where the magic happens most of the time, but if you are close the the "action" more and more things do happen.
For an example: Try to make a movie outside of the Hollywood sphere. Sure it can be done, but it takes a LOT of patience.
Hollywood is a good comparison: the initial reason to move from New York to there was the cheap land (and lax labour and heath and safety regulations). Of course, the area soon proved to offer other advantages.
In a sense it's an even more globalised industry than electronics but at least the money is still very much focussed in Hollywood, despite the billions in subsidies (Louisiana currently leads the list, I believe) available around the world - and just like the many wannabe Silicon Valleys, very little of the money stays in the area providing the subsidies.
Bollywood and the Lagos film industry are perhaps testimony both to the success of model (critical mass of talent and money) and to the need for differentiation in order to be able to compete.
"Hollywood is a good comparison: the initial reason to move from New York to there was the cheap land (and lax labour and heath and safety regulations). Of course, the area soon proved to offer other advantages."
Thomas Edison vigorously pursued patent violations of his cinematography hardware in New York State. I think California was a lot more relaxed about such things.
Overall good stuff; but one quibble:
"Burbidge counted almost anything as East London or Tech City's own. She cited a high-tech manufacturing company "in Somerset" that made drones."
Andrew had moved onto a general point about the government fetishising startups versus genuinely high-tech investment, and she brought up that example as a counterpoint. The conversation had become quite wide-ranging at that point. So using that as some kind of 'evidence' in the article seems like a pretty low blow and frankly a little bit beneath what I'd expect from Orlowski.
I only bitch because I care.
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