UK Government plans to create a "Silicon Valley" in London

http://eu.techcrunch.com/2010/11/04/uk-government-plans-east-london-tech-cluster-startup-visa-review-of-ip-law-200-million-in-finance-what/

by Stevenup7002 • 16 years ago

28 40 16 years ago

eu.techcrunch.com

davidedicillo• 16 years ago

The problem is that you can't "create" Silicon Valley.

Stevenup7002• 16 years ago

I totally agree, the bay area will always be preferred over other centers. But I think this will be a great alternative for European entrepreneurs that can't secure a visa to start up in the US.

bsk2• 16 years ago

>>the bay area will always be preferred over other centers

I can guarantee that in 5 billion years from now that won't be the case ;-) In this fast moving world it will probably take a lot less time for powerful technology business centers to emerge in BRIC and elsewhere.

petesmithy• 16 years ago

err, not just about visas -- i don't believe i have to move 5,500 miles and 8 hours' time difference from home to succeed.. :)

jodrellblank• 16 years ago

Do you know anywhere that has seriously tried, or do you have any justification for claiming this?

arethuza• 16 years ago

I don't know if it is possible or not - but I seriously doubt that UK civil servants are the best people to try and do it.

rythie2• 16 years ago

It's already there and has grown 700% in 3 years: http://www.techhub.com/magazine/read/tech-cluster-around-lon...

They are just adding fuel to the fire.

redwoods5• 16 years ago

Any votes for Silicon Ditch? "Silicon Roundabout" is one name that has stuck for the tech cluster around the ugly traffic circle in the Old Street area of Shoreditch, East London. I think "Silicon Ditch" is catchier and maybe articulates the British penchant for self-deprecation better...

petercooper• 16 years ago

Too similar/evocative of the existing "Silicon Fen" just 50 miles north.

redwoods5• 16 years ago

Yes but Silicon Ditch definitely evokes the grimey feel of Old Street. A founder of Huddle described Silicon Valley as Reading (UK) but with sun and palm trees. Even if you filled Old Street with sun and palm trees - it would still be grime - central (though I love working there).

DjDarkman• 16 years ago

It would be refreshing.... the US is far too restrictive with it's Visas.

semanticist• 16 years ago

Thrilled to see more investment money for London. It's so often overlooked compared to the rest of the UK.

I see lots of people desperately trying to push startups/startup culture up here in Edinburgh, meanwhile everyone leaves for London or expects you to relocate to London.

hartror• 16 years ago

It is the network effect. Sure you could try to get all your friends onto Friendster but most of them are already on Facebook. (poor example I know, why would anyone want to do that!?).

bilban• 16 years ago

What's the scene and rent like up in Edinburgh? Sounds far more attractive than the big shitty.

jcdreads• 16 years ago

Our pg has, of course, had much to say about the feasibility of this kind of thing:

* http://www.paulgraham.com/siliconvalley.html

* http://www.paulgraham.com/startuphubs.html

* http://www.paulgraham.com/maybe.html (a proposed recipe for how to do maybe create a new startup hub; that's actually somewhat more modest than what the tc article describes)

The most salient quote from those articles, IMO: "Of course, a would-be silicon valley faces an obstacle the original one didn't: it has to compete with Silicon Valley."

I would note that if the UK are serious about this "entrepeneur visa" then that could get very interesting. Currently I can't imagine fighting through the federal paperwork required to start a company in California if I weren't already an American. Should this hub nucleate properly I can imagine most non-UK non-US citizens vastly preferring dealing with UK immigration to what has to be a frustrating US system. (Any non-UK non-US folks care to comment more informedly on this?)

And real estate is stupidly expensive in London, so they're halfway to Silicon Valley already.

[Edit: formatting]

bsk2• 16 years ago

There is very little paperwork required to get a resident permit and register a limited company in UK. In the last 6 years the administration has taken measures to prevent abuse of unemployment benefits and child support by self-employed ppl (mainly immigrants from Poland). But as far as one can sustain himself and pays taxes he is trouble free.

My impression is that most of the Asian, African, Balkan, etc newcomers to London are self-employed or LTD owners. That route is far easier than getting a work permit.

eru4• 16 years ago

Working in the UK seems to be relatively easy for people from Commonwealth countries, e.g. India. For EU citizens it's even simpler. I don't know about the conditions for Americans working here, though.

So, I agree, easier immigration is one point to base your leverage on, when competing with silicon valley.

The area around Cambrige, UK, already toys with the slightly pretentious name of Silicon Fen.

wlievens• 16 years ago

Pretentious, maybe, but it hosts a world-class company (ARM).

ig12• 16 years ago

It's pretty trivial to get a Tier-1 visa if your a programmer, you have a year or so before you have to get a job, and you can work for your own company as long as you're earning a competitive wage.

rythie2• 16 years ago

However, isn't this bit like saying you can't beat IBM, Altavista, Friendster/MySpace or other established companies.

kapitalx2• 16 years ago

When asked can Chile make a Silicon Valley by pouring money into it?, the Chilean minister of economy speaking at Stanford responded that unlike other countries (such as Russia, and now UK) Chile will try the following instead of pouring money into it: 1. Create Role Models (Young Chilean entrepreneurs that succeed) 2. Reform the laws (bankruptcy and immigration laws) 3. Invest in Universities to promote technology 4. Start networking programs with Silicon Valley (for example they brought a bunch of their entrepreneurs here to work for a while, and are taking some entrepreneurs from here to mix the cultures).

In general he also said that they need to remove the negative view of failure somehow, which doesn't exist in silicon valley, but they haven't figured out how to approach this one yet.

eru4• 16 years ago

Yes. I also caught an interview with Chile's president the other day. It contained remarkably little bullshit for a politician (almost nothing). The interview was about the miners' rescue.

kapitalx2• 16 years ago

I found the Chilean minister of economy's talk quite interesting and smart, but I guess his audience was Stanford students and not the general public, so he could talk differently.

donaldc• 16 years ago

If they're serious, and it sounds like they are, I'd suggest two more changes that weren't mentioned in the article:

(1) An employee in the UK can currently be required to keep working at a company for 3 months after giving notice. This should be shortened.

(2) Make most non-competes unenforceable. This is a very under-appreciated reason why silicon valley prospers.

redwoods5• 16 years ago

This is not quite right: 1. In the UK you are not required to work three months after giving notice unless it is a provision of your contract of employment. If you don't have a written contract - then you will be entitled to a statutory notice period that roughly accrues in weekly units depending on years worked - but with cap. However,you can be paid in lieu of notice. It is fine to employ someone on one months notice - and less if they have worked for you for less than twelve months. 2. Restrictive covenants are unenforceable in the UK if they are unreasonably wide. ie you may be restricted for a year from hopping into a company that does the same thing in the same area. But not from using you transferable skills in a different company or different area. If someone tries to get you to sign to a two year, 200 mile radius, transferable skill / different business restriction - sign it and don't worry as it will not be enforceable.

ohashi• 16 years ago

link to full article: http://eu.techcrunch.com/2010/11/04/uk-government-plans-east...

lshepstone• 16 years ago

Love the sentiment, but I'm not sure they're going about it in the right way. Of course any attention and funding is better than none, but instead of getting McKinsey to advise someone or open a few offices in East London I would much rather:

* UK GOV creates a stupidly attractive tax and investment climate so that VCs are practically falling over themselves to invest in UK companies. The EIS scheme and VCT schemes are ok, but they could make these 10x more attractive. * Create jaw-dropping incentives for startups who deliver on what the UK GOV want, basically exporting services or creating jobs. Those kinds of companies should be afforded amazing incentives such as little to no tax for x years, no crazy 12% benefits to pay employees and how about little to no paperwork. * Perhaps some type of matched-investment scheme, where UK GOV will match investment from private angels or VC's * I am extremely encouraged to see that the gov is thinking about opening up procurement to small businesses. I fear that this won't happen in a timely manner and will face extreme hurdles. It is virtually impossible to get on the supplier list of the gov now, and even if you as a small hosted startup managed to pull of such a feat the first thing the local IT bod would ask for is SAS70 Type II compliance because that is government mandated. It seems crazy to us, being a UK startup, that one of the least likely customers would be our own government. You'd think they should be mandated to buy from small British companies in the spirit of helping your own economy.

It is really difficult to create a climate of risk taking that is evident in the valley which is fairly critical to this whole endeavor, I don't know how one manages to do that. But I sincerely hope someone manages to find out.

There just isn't the same tolerance for risk here in the UK and so the only mechanism I can see to break this scenario is to offer out of order incentives.

ig12• 16 years ago

(copied from the dup'd thread)

Why this won't work: You can't build a startup cluster to "renew an area".

It doesn't work like that. Old Street works because the location is decent (safe and well connected), it's cheap and the other companies there. The area has to attract people who want to work there and you can't artificially build that.

The location they're proposing put this new tech area goes through the area known as "murder mile". Yes it's cheap, but it's high crime rate means startups aren't going to locate there. It would be like trying to build a startup cluster in the Bronx because it's near the NY startup community.

billpaetzke• 16 years ago

Funny you should mention the Bronx! NYC is doing just that. Heh. Article posted today: http://news.ycombinator.com/item?id=1866360

dmitri1981• 16 years ago

One thing that has amazed me about London is how quickly it changes and develops. An area can go from being being run down to 'gentrified' within a decade. It will eventually happen in Clapton as well.

viraptor• 16 years ago

I really like the comment:

    > “Facebook will create a permanent home in East London for
    > their Developer Garage programme” – hmm, that’s news to us!
    > [...]
    > Dave Nattriss
    > Secretary
    > Facebook Developer Garage London

I wonder how that happened.

gamble• 16 years ago

Are you a government bureaucrat desperate to leaven all the recent talk of cutbacks and austerity with a touch of high-tech fairy dust? Enjoy the idea of hobnobbing with exciting personalities like Steve Ballmer and Mark Hurd? Follow my simple guide and your country can also enjoy the limitless prosperity and social harmony with which the technology industry has blessed California!

First, you'll need a name. It has to start with the word 'Silicon', even if the only silicon that will be present comes stamped with the Intel logo. Next, choose a geographic feature. Unfortunately, the best geographic features have already been claimed. May I suggest "Silicon Muskeg"?

Now, if you visit the actual Silicon Valley, you will see a lot of office buildings. Ample supply of office space is the reason Silicon Valley is a success. So, the first thing you're going to need is a nice big, empty space to build offices. Lots of them. Try to find an economically depressed area, far from the places educated workers live (cheap!) and miles from public transit. Make sure this area is zoned so that only large, expensive cubicle farms and parking lots will be built, as this is the most efficient use of space. No services are necessary, as the people working here can simply drive into the city if they require food or drink.

Also, it is vital that your new offices be supplied with fiber-optic Internet service. Rare and difficult as this may be to provide, Internet service is what separates your mind-bending city of the future from the primitive hovels your country's technology industry now inhabits.

No replica of Silicon Valley would be complete without tenants! And so, your final task is to fill these offices with the industries that define the dynamism and forward-thinking spirit of Silicon Valley: IBM, Microsoft, Intel, and Dell! Don't waste your time on small fry: Fortune 500 only, please. It matters not if your new offices are filled with call centers and rebate-processing facilities, because the very soul of technology will leach from the telephones and TPS reports, permeating the landscape with the pure essence of innovation.

So huzzah, dear bureaucrat, and godspeed!

anamax• 16 years ago

> Now, if you visit the actual Silicon Valley, you will see a lot of office buildings.

Not just any office buildings, tilt-up office buildings.

And, we drive on the right.

And you've got to make sure that it doesn't rain for half of the year and doesn't snow in the other half.

redwoods5• 16 years ago

Silicon Muskeg? According to wiki: Muskeg is an acidic soil type common in Arctic and boreal areas, although it is found in other northern climates as well. Muskeg is more-or-less synonymous with bogland but muskeg is the standard term in Western Canada and Alaska (while bog is more common elsewhere).

That would be better for the tech hub near Cambridge, UK - Silicon Fen - not Shoreditch, East London

I still prefer Silicon Ditch - where we already have the pure essence of innovation permeating the landscape. Its just a grimey landscape, with fewer palms.

robfitz• 16 years ago

I'm guessing you aren't currently a part of the east london startup community.

I'm excited. When we moved the company here, one of my co-founders was deported (back to America). Not helpful. The investors here are very good (Index, Atlas, Accel, Eden, etc), but there's not a huge number of them. Official momentum like this has a good chance of getting other investors to have a more official presence here (a few from NY visit with some regularity, but we rarely see the valley's firms).

Little things like good internet will help a lot. My office has just 7 or 8 people in it and we're using a combination of two home DSL connections and a 3G modem. That's the best we can do and it's outrageously bad. Larger offices (20+ people) face an ongoing and unending battle just keeping their team online.

I don't really get the objection to the big tech companies having a presence.. in an ideal world would you want to boot them out of the valley, too? They offer jobs which are both an attraction to new tech talent from all over the EU and a fallback in the case that a startup doesn't work out. Without the presence of big tech companies, you also lose the primary acquirer of small tech companies.

Finally, and most importantly, they didn't just choose some arbitrary "poor" spot on the map. The particular area in east london they're targeting is arguably the best startup hub in Europe, and is undoubtedly the best in the UK. Lots of great founders are already here, and I'm pleased that there's some official support.

nickthedart• 16 years ago

This is a nice idea but I believe is in the wrong location and the government has missed an opportunity. London simply has far too expensive housing and is too crowded and a lot of smart people won't live there. Silicon Fen in near Cambridge also has very high housing costs. A UK silicon valley needs to happen where its cheap to live, geeks actually want to live there, and there are decent transport links to London. I think a better tactic would be to electrify the Midland Mainline to make the trains to/from the north faster. Then you could make tech hubs in places like Nottingham (which is a fun place for 20-somethings to go out AND has cheap family housing too) or Sheffield (ditto and has rock climbing on the doorstep as well). Its ridiculous how so much tech work in the UK is concentrated in the crowded expensive south-east, and I believe an enlightened government would try to capitalise on the talent in the rest of the UK.

redwoods5• 16 years ago

Shoreditch - Silicon Ditch - is a great area to work - it has a great buzz and creativity - and living is not too expensive if you head further into east london - you don't have to live in west london, which admittedly is too pricey.

gazrogers• 16 years ago

It's hard to express how angry this makes me feel.

They've just supposedly slashed public spending which will result in the loss of thousands of public sector jobs - mainly in the less affluent north - and now they're planning to invest some of the 'savings' made from that action into the already over-invested south. Taking from the poor to give to the wealthy.

There are cities in the UK other than London. Birmingham and Manchester for instance.

I am seething.

UK Government plans to create a "Silicon Valley" in London

Related Stories