A Tale of Tech City: the future of Inner East London’s Digital Economy

Earlier this month Demos published a fascinating report on the hot topic of London’s “Tech City” cluster, which has been promoted by the government as a key growth pole for the UK. The report authors Max Nathan, Emma Vandore and Rob Whitehead, put the Inner East London cluster in the context of similar phenomena in New York and Berlin; and get their hands dirty with some in-depth data analysis and face-to-face interviews of entrepreneurs. Policy recommendations are then made for the best way forward.

There have been some cool efforts at mapping the Silicon Roundabout Shoreditch/Old Street cluster from Wired UK, and from Tech City Map using social networking connections. A more traditional robust approach was taken in this report of using the various business survey datasets to measure firms and their activities. The scale of the cluster (defined more widely to include Clerkenwell, Shoreditch and Hoxton) was found to be larger than previously thought, at around 3,200 digital economy firms and 48,000 jobs, with these industries becoming increasingly important for the London economy.

I got involved with the project doing some density mapping of the core industries that make up the cluster: ICT firms and creative industry firms. The key message that comes from such mapping is that the cluster is embedded in a digital-creative corridor stretching from the West-End and Soho through Clerkenwell and on to Shoreditch.

From a spatial perspective, the cluster is about the Jane Jacobs type urban diversity fusion of IT and creative industries, very similar to Silicon Alley in NYC. High profile success stories like LastFM (music, digital broadcasting and social networking crossover) and Unruly Media (advertising, social network and analytics crossover) are prime examples of this integration. This tech-creative fusion clearly distinguishes the Inner London cluster from the IT software/hardware concentrations you get in Silicon Valley, or in the “Western Wedge” around Heathrow.

A high profile policy objective from the UK government has been to link the Inner East London cluster to future opportunities at the Olympic Park. The Demos report convincingly argues that the focus should rather be on the current cluster, enhancing funding opportunities, skills and growing new businesses. Moving to the Olympic Park is problematic in terms of it lacking the history, creativity and ‘vibe’ of the current cluster. The absence of creative and IT firms around Stratford is apparent in the above maps. Opportunities in the Olympic Park are more likely to suit larger established IT and engineering firms attracted to new high-spec offices.

That’s not to say the Olympic Park can’t have a role however. The firm interviews in the Demos report identified the lack of skilled workers being a big issue, at all levels including graduates:

There just aren’t enough computer scientists in the uk. And we need computer scientists, we don’t need – what do they call it – ICT trained people. We need real computer scientists who do software engineering and programming. No education coupled with visa restrictions is not a particularly good combination.

So apart from lifting the current counter-productive visa restrictions in the UK, there’s a clear role for universities in training more computer scientists with the right skills to succeed in these growing industries. This is what London universities are now in the process of doing at the Olympic Park, with new campuses planned and initiatives such as the UCL-Imperial smart cities institute in the pipeline. Your very own CASA is already involved in training graduates with smart cities skills. Smart Cities industries can themselves be viewed as a built environment-engineering-ICT fusion, likely complimentary to creative industry clusters.