Archive for the 'technology' Category

Tech City at City Hall

December 7, 2011

I gave evidence to the London Assembly Economy, Culture and Sport Committee  on Tech City yesterday.  On the panel with me were Eric van der Kleij (Tech City UK), Kulveer Ranger from the Mayor’s Office, Theo Bertram (Google), Georg Ell (Yammer) and Jeff Lynn (Seedrs).

You can see the 90s-style ‘webcast’ here. There’s some entertaining political gunfighting between Kulveer Ranger and some of the Labour members for the first 20 minutes, and then a good hour of discussion after that.

Happy viewing!

Liquid City

October 13, 2011

A quick debrief from last night’s Liquid City debate, ably put together by Future Human. I was on the panel, alongside Eric van der Kleij from Tech City UK and Andrew Carter of Centre for Cities.  It was a really helpful session for me, with a super-engaged audience full of good ideas and sharp questions.

Unvarnished notes follow.

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Strategy

‘Tech City’ is nice shorthand for London’s rapidly-growing tech scene, especially its nexus around Old St. What can policymakers do to help it along, if anything?

Eric set out his four main tasks:

1 / Stop Government messing things up

2 / Help big firms to come

3 / Help small firms to grow, e.g. through access to finance

4 / Promote ‘talent’.

Still quite vague, but the focus on micropolicies is wise. International evidence gives no clear steer on what Government’s role, and standard cluster policies have a very patchy record.  Rather than just ‘building Silicon Valley in the UK’, strategy needs a distinctive London flavour.

The Olympic Park

It’s still not clear to me how the Olympic Park fits in – except as a big space nearby that will need filling post-Games. Officials hope that tech firms priced out of Silicon Roundabout might come to the Park. This feels optimistic , and  rather goes against the intention not to masterplan the cluster.

More promising is the idea that the Park can morph into a campus for big firms like Cisco. Siemens have announced something similar in the nearby Royal Docks.

Big firms, small firms

What might global firms like Google and Facebook might do for, or to, Shoreditch? Eric was clear that big firms should be ‘good neighbours’, citing Google’s upcoming hub and Cisco offer of free telepresence as examples. Ministers are ‘encouraging’ them to set up R&D  facilities here, but of course can make no promises. Someone suggested using Section 106 agreements to leverage, say, incubators, as a condition of setting up shop here – an idea worth looking at.

The room was divided about the competitive threat posed by big arrivals. A few people worried about small firms being ‘eaten’ by bigger ones. But for most companies in the Bay Area, being bought by Facebook is a dream outcome.  More important is that the local ecosystem keeps producing new firms and new ideas. Which brings me to …

Gentrification

As Silicon Roundabout gets more popular, it will get pricier, and some firms will get pushed out. This is part of the  neighbourhood change cycle. For small companies it’s of course disruptive, though London is big enough to allow new hot neighbourhoods to form. Policy can help by providing some cheap space, and avoiding any needless property shakeups. The area’s ‘soft infrastructure’ – cafes, bars and public spaces – also helps people get their creative work done. Keeping the feel is as important as keeping physical space available.

Failure

The UK needs to change its attitude to business failure, and develop a more positive view of serial entrepreneurship. This is partly a legal issue – bankruptcy rules in California are more relaxed than here. It’s partly attitudinal – US VCs actively look for entrepreneurs who’ve tried out a few ideas and learnt from their mistakes.

More broadly, we need to remember that Tech City is a long game. A lot of the innovation hotspots mentioned – in the US, Finland and Israel, for example – took decades to mature.

Human capital

We can accelerate innovation by helping smart people cluster together. But current immigration policy will hurt London’s ability to keep international talent. The Entrepreneur Visa, which requires £50k of backup funding per application, isn’t terribly helpful. Equally, London needs to get better at growing its own skilled people – improving education and training systems, and opening up routes into the industry are both forward priorities.

London’s cultural diversity is a big plus. My research (here and here) suggests that diversity helps push up innovation.  However, Silicon Valley’s heavy dependence on international migrants is a cautionary tale – diversity has done a lot for the Valley, but firms are often at the mercy of DC immigration politics.

Why Tech City is like Fight Club

February 10, 2011

‘The first rule of Tech City is, you don’t talk about Tech City,’ someone says. We’re sat in a conference discussing the Coalition’s plans to turn East London into Silicon Valley. Others around me nod their heads. ‘What we’ve got here already is great,’ says someone else. ‘My message to Government is: don’t fuck it up.’

The Tech City proposals still feel like ideas without a strategy. Government wants to support the nascent tech cluster around East London’s Old Street; bring in big investors like Facebook and Twitter; and develop the post-2012 Olympic Park into a high-tech hub.

It’s not hard to see tensions (see above, from one of the breakout sessions). Will big arrivals threaten existing firms? Could start-ups be pushed out by rising rents? How far will East Londoners benefit? And what’s in it for the rest of the UK?

So far, Ministers have mixed hands-on optimism and hands-off caution. ‘This is our attempt to generate Silicon Valley in the UK’, announced one at the event. ‘We seem to have a cluster on our hands,’ said another. ‘Do we need to do anything about it?’

Here are some evidence-based thoughts that I hope will help.

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In theory there’s no need for cluster policies: firms should sort across space to optimal locations. In practice this often doesn’t happen. Because of agglomeration economies, co-locating firms raises their productivity – which raises urban wages.  So cities can benefit if we push firms together.

Some sectors are far more location-sensitive than others, though. So a tech city strategy needs to start with the firms we’re interested in, then configure urban space accordingly. First tech, then city.

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BIS already has a shopping list from the tech industry – better access to finance, improving intellectual property regimes, improving workforce skills, easing immigration caps, cheaper rents and widening the open data initiative. Not all of these merit intervention, although some do (more below).

The technology industry also tends to cluster locally. Yet firms’ markets and supplier relationships are often global, and important functions (like customer services) are often offshored.

So how does the city fit in? London’s tech businesses are largely service-sector, and benefit from the matching, sharing and learning economies that big cities offer.

These effects kick in at different scales. At city level, London offers economic diversity, access to skills, finance and world markets. At neighbourhood level, East London offers soft infrastructure – the cheap spaces, bars and coffee shops where a lot of creative work actually gets done.

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We need to be realistic about growing our own Silicon Valley. As I’ve said before, the Valley is a city-region, over 1300 square miles across – more than twice the size of Greater London. It also emerged over decades – Tech City has barely begun.

UK research suggests that science parks can boost innovation rates. But much of this is driven by bringing smart people together. Elsewhere, purely property-led strategies have failed.

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I think this leaves six big challenges for London.

First, what is London’s USP in the global tech field? New York City might be a better comparator than Silicon Valley. Like NY, London’s tech scene is cross-pollinated by the wider creative economy.

Second, how much strategy do we need? The wider role for government isn’t clear from international experience. In the Bay Area government did little, except spend large amounts on defence-orientated research. But Bavaria’s leaders took the opposite approach, developing a cluster through political leadership, public spending and public research agencies like the Fraunhofer Institutes.

Third, finance. Both the Bay Area and New York have large local venture capital scenes. London firms complain about this. Are there information gaps or deeper structural problems in connecting London VC to London  businesses? What, if anything can policy do to help?

Fourth, how best to build human capital? Bavaria grows its own skilled workforce; Silicon Valley depends heavily on skilled immigrant workers. London is somewhere in between, although the Coalition’s migration cap is already making life harder for tech firms.

Fifth, should we worry about gentrification? Silicon Roundabout is a vibrant local scene, but higher rents could push local firms (and services) out. London is big enough for that cluster to reform, but does short term disruption outweigh any wider gains?

Finally, what’s in it for the rest of the UK? At the moment, very little. Whitehall can probably help by concentrating on ‘tech’ – sectoral support that helps firms everywhere – and devolving the ‘city’ bit – property, planning, economic development – to the GLA.

Germany’s Silicon Valley?

December 15, 2010

LSE Cities have just published a new paper of mine on innovation and growth in the Munich city-region. In terms of high-tech growth, the Munich metro is probably Germany’s Silicon Valley – it’s a fascinating story, with lessons for both the Bay Area and for British policymakers.

The report (written with Philipp Rode, Gesine Kippenberg and others) was launched last week at the Brookings-LSE Global Metro Summit in Chicago. You can find other speeches, papers and video here.

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For over two decades, Munich has had Germany’s highest share of technology patents per population. Like the Bay Area, it’s led the rest of the country on ICT. And Munich’s story has some further, surprising parallels to the history of the Valley. Over the past 60 years, both have shifted from mainly rural communities to high-tech hubs. Both offer a strong economy and an excellent quality of life – something that’s helped keep people in the area. And both benefited from Federal defence funding – Pentagon money helped fund the early Internet, while in Munich’s case defence cash built up the advanced manufacturing sector.

In other ways, Munich is very different. The metro has a notably diverse economy – the ‘Munich Mix’ spans manufacturing, ICT, life sciences, finance and creative industries, unlike the Bay Area which is still dominated by computing.

More importantly, Munich’s economic development has been hugely influenced by the State, especially the Bavarian regional government. It’s essentially a social democratic Silicon Valley.

Government spends heavily on public schools, universities and strategic infrastructure. Munich is at the centre of a network of innovation intermediaries – public research agencies like the Fraunhofer Institutes, dedicated to technology transfer. And there are very strong networks between public and private sectors.

In the jargon, this is ‘institutional thickness’. It’s created a strongly technocratic vision of economic progress, and a clear sense of common purpose. Or as they say at Audi: Vorsprung durch Technik.

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As a result, Munich’s leaders rode out a potentially disastrous period in the early 1990s when the area was hit by a triple whammy of re-unification, recession and global competition. Over the next two decades, state and city developed a rolling programme of policies to grow innovation capacity.

Our research suggests it paid off. Munich’s per capita economic output remains comfortably above regional and national averages. The metro has also markedly increased innovative activity in ICT, biotech and green industries – with a three-fold rise in green patents over the last 20 years.

The growing green economy sector has also benefited from pro-green federal policies, which have guaranteed a market for green energy and thus spurred a new industry of green energy products and services.

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Of course, Silicon Valley’s market-led model has yet to face such a crisis point. But as the Valley focuses on ‘cleantech’, Munich’s state-led model is looking increasingly attractive. VC money is pouring into green economy start-ups across the Bay Area. But California still lacks the quality public education system that will connect local people into new jobs.

More importantly, the US has not introduced market-making incentives like carbon pricing or feed-in tariffs. So California is going its own way – although its State-level cap and trade scheme has only just survived a Big Oil-sponsored public vote.

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What can the UK learn from the Munich experience? A lot of lessons are familiar. High-tech regions grow out of what’s there. Economic diversity is helpful, adding resilience and helping stimulate new ideas. Human capital is critical, as are good schools and universities. Both time and luck matter more than we’d like.

For me, the crucial lessons from Munich are about what the public sector can do. There are three.

First, decentralisation has given Munich flexibility to develop policies that suit its needs. It’s also helped strong leaders to develop, and over time, effective working across boundaries (and political parties).

Second, both local and national governments have kept up public investment in the things that matter – notably human capital, public services and strategic infrastructure.

Third, incentives and market-making are really important – especially in moving towards a greener economy. British cities can do something here, but it’s really about national policy, and political leadership.

What’s the point of science parks?

November 7, 2010

Last week David Cameron launched ‘East London Tech City, which he hopes will become ‘one of the world’s great technology centres’. Could it work? Up to a point, according to research from LSE. Science parks can pay off, although it’s unlikely they’ll create the next Silicon Valley.

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Theoretically, we shouldn’t need science parks at all. In spatial economics models, firms sort across space to optimal locations. In practice, this doesn’t always happen. Planning restrictions limit space; businesses may lack the funds to move; and some firms will head to prestigious addresses, rather than the most productive.

So policies that try to cluster firms together might be a good idea. Theory and evidence suggest businesses benefit from co-location. Big labour markets, a rich mix of input-output linkages and knowledge spillovers help firms become more innovative – and more productive. In turn, this helps explain why cities form and grow.

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So, can science parks can replicate these dynamics? Christian Helmers, a research economist at SERC, is trying to find out. There are now at least 85 parks in the UK, with over 76,000 workers on site. Helmers looks at two: Cambridge Science Park, the UK’s first and most prestigious, and the St John’s Innovation Centre next door.

Christian is interested in whether science parks drive up firm’s innovative activity. So he tests whether co-location raises patenting rates. He finds it does. He also looks at what types of firms tend to gain. Controlling for various other factors, he finds that inside the park, firms of the same industry tend to patent more. Science parks can pay off.

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What does this mean for policy? Christian suggests policymakers should promote specialised science parks, dedicated to single industries. I think there are some wider lessons here too – not all of which are good news for East London.

1) Lifecycle – Helmers finds no significant effect of firm age on patenting – that is, start-ups don’t particularly benefit from being in science parks. This echoes other work which suggests that economically diverse cities act as ‘nurseries’ for young firms – basically offering a big pool of ideas, suppliers and people. In turn, it suggests that unless they’re in big cities, incubators might not be effective.

2) Mix and scale – Christian’s research basically tells us that at small scale, similarity matters – firms gain from having others like them around. (In the jargon, science parks exhibit ‘Marshall-Arrow-Romer’ externalities.) But at city scale, the opposite seems to be the case. Economic diversity matters. Jane Jacobs first suggested knowledge spillovers across industries – recent work by Duranton and Puga and a team at SERC empirically confirms this . So we shouldn’t expect science parks to drive cities.

3) Expectations – Silicon Valley is not a valley – it’s a city-region. By contrast, science parks are tiny. Taken together, Cambridge Science Park and the St John’s Centre cover around 2m square feet. At a conservative estimate, Silicon Valley covers 1300 square miles. To put point 2) another way, no science park (or Silicon Roundabout) is going to be the next South Bay.

4) Surroundings – some of Christian’s results have to be driven by what’s outside the science park – in this case, Cambridge University and the Cambridge high-tech cluster. All the firms in the park benefit from high quality research and a big pool of skilled workers. The East London park will have to draw on the whole of London’s innovation system if it’s to benefit its tenants. The London location will clearly help. But as Vivek points out here and here, high-tech growth is fundamentally about people and culture – not property.

The secret life of Shepperton

September 29, 2010

Some new art stuff.

First up, Mat and I have finally completed our photo essay on Shepperton, where JG Ballard spent most of his adult life. We’ve combined our pictures with text from Ballard’s own novels, autobiography, interviews and other text about the town and its history. In the process we’ve shamelessly taken inspiration from Patrick Keiller, Chris Marker, Iain Sinclair and many others. We hope they, and you, like it.

A shorter version of the essay appeared in Shadows Have Shadows, a limited-run newspaper published earlier this year by the mysterious SFHAA. It’s a nice collection of pieces on street-level urbanism – spanning London, San Francisco, Caracas, fictional cities and cities of the future. The paper itself is an A4 object of beauty, produced with the help of Newspaper Club. Sadly there’s only 100 copies, but you can also read it online here.

Finally, here are my pictures of the astonishing Red Sand sea forts, which I visited with Reuben a few weeks back. More about the forts and how to reach them at the Project RedSand website.

Now, back to the PhD …

On yer Boris Bike

August 25, 2010

Who actually uses Boris Bikes? Commuters, civil servants and city types. Who doesn’t? Shoppers and posh people. That’s the story so far, as suggested by data from the London Cycle Hire Explorerflagged in Londonist, and recycled in Wednesday’s Evening Standard.

The Explorer app is simple but powerful: it shows the 10 most and least popular docking stations across the capital. Obviously it’s early days, and usage will change (see below). And I’m just eyeballing the data – no fancy analysis here. First impressions:

1) Commuters are the main users – the most popular spots are mainly around the major stations – Waterloo (354 bikes yesterday), King’s Cross (305), London Bridge (256) and Liverpool Street (226). This is why TfL already wants to spend another £81m on new bikes and docking stations.

2) Biking to meetings and running errands also seem popular – viz heavy daytime (and lunchtime) use during the week in Covent Garden, (196) Strand (189) and Fitzrovia (187).

3) Weekend biking is on – judging by the past week at least, there’s no obvious drop-off on Saturdays or Sundays in the most popular spots. That suggests some tourists might be venturing out too.

4) There’s a bit of an East/West divide – six of the least popular docking stations are in West London, mainly Kensington (28 bikes) and Chelsea (25-29). I would have expected some use around Paddington and White City, but perhaps the Westway is putting people off. Support for scary road theory comes from other cold spots around Elephant and New Kent Road (26 each).

5) Alternatively, bike use is low in well-off neighbourhoods where residents prefer to drive, such as Kensington and Chelsea, Bayswater (27) and St John’s Wood (20). Or where serious shopping is going on (all of the above).  Obviously that’s just postcode stereotyping, but still – I bet there’s something in it.

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The open data is incredibly helpful, and not just for urbanists. At one level the bike scheme is a gigantic social experiment – give people new tools for getting around the city, step back and see what happens.

There are useful parallels here with new technologies, especially portable gear like mobile phones. The lesson from these is that technology changes us, but we change it too, and unpredictably. In the jargon, use is endogenous to the user.  Texting is the classic example of user-driven innovation for mobiles: open platforms like Android are doing something similar for smartphones.

A lot of this happens through experimenting and messing about, and this is already happening with blue bikes – via mashups like the Explorer, or Barley-ish attempts at stunt riding. More interesting stuff is bubbling up at this user forum.

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In turn, that suggests Boris Bike dynamics might look very different in a year’s time. So far, riders are currently making 19,000 journeys per day, not put off by bikes variously described as ‘like flying Ryanair’ (Jon Snow) and ‘like driving a tractor’ (anonymous friend).

That number could rocket up when Pay as You Go rates are introduced, and the early adopters are joined by loads of tourists and casual users. We could see new hotspots around St James’ Park, Baker Street and Tower Hill. And even bike snobs like me might get round to trying the thing …

City in a box, unboxed

June 10, 2010

Excitement online and in the twittersphere about the Cisco ‘city in a box’ being built in Songdo, South Korea. There seems to be a bit of a utopian city meme at the moment – instant cities,  floating cities and Paul Romer’s Charter Cities (which I discussed a while back). Last week’s Economist even showcased a whole series of prototype ‘cities for 2030′.

As the Economist piece points out, there’s something slightly odd about these kind of exercises. Cities tend to emerge and evolve organically, even chaotically, rather than being built from scratch: and their residents and users tend to be resistant to masterplanning.

A closer look at Cisco’s instant city actually confirms all this quite neatly. First, it’s not a city, it’s a business district – albeit one that could house up to 1m people. Second, it’s neither new or self-contained. Instead, it’s a bolt-on to an existing city, Incheon, the 3rd biggest in S Korea.

This kind of CBD megaproject has been done before – in Canary Wharf, for example, which works pretty well as a financial service cluster, if not as a functioning community. (With a working population of around 90,000 people, it’s over ten times smaller than Songdo.)

I can see the potential for this kind of plug-in planning in China in particular, given the pace of urbanisation there. The developer at Songdo reckons there’s a market for at least 20 more in China and across South East Asia. That’s plausible if the demographics and national economies hold up. But ‘build it and they will come’ is an inherently risky strategy – just look at Dubai.

I’d also love to see Cisco try this in a small, highly urbanised Global North country like the UK. Our biggest urban planning challenges in years to come is going to be greening the cities and buildings we’ve got. The eco-towns initiative doesn’t tackle this, and the programme is basically marginal.

But in growing places, there’s potentially an important role for high-tech, resource-efficient urban extensions – around Greater London, Manchester, York, Cambridge or Brighton, say. The problem will be the total lack of public funds to help actual building. Perhaps Cisco can step up to the Big Society plate and donate one?

ps. I’m now finally on Twitter – find me here.

pps. We’re now on holiday for a bit. Blogging returns in July.

Green cities, green jobs

March 7, 2010

Green jobs are hot. All three political parties want to shift Britain onto a low-carbon growth path. It’s a powerful meme. Two questions, then: what are green jobs? And where will they be? My guess is: mostly quite boring. But they will be everywhere, and they will be a big deal for towns and cities.

So what are ‘green jobs’? ippr’s new report suggests that ‘all jobs should be green’ in future. I’m not sure. Let’s focus on activities with the biggest carbon footprint: energy, waste, transport and construction. Some jobs in other sectors can be greened too, say if manufacturers adopt more sustainable workflows.

Where will green jobs be? To answer that, we need to consider how the UK moves onto a greener growth trajectory. There are two basic approaches, impling different roles for government – and different levels of political engagement.

Let’s call the first the Green Industries approach. This is about increasing the UK’s global share of high-value green activity – like wind turbines and low-carbon vehicles. It also encompasses major infrastructure like high-speed rail. National Government holds the policy levers: public money, tax breaks, business support (and to an extent, picking winners).

The second approach we could call Green Places. This is about making towns, cities and households more sustainable. The focus is on non-traded activities: buildings, energy and waste systems, local public transport – and things like repairing windmills on roofs.

Local government has a critical role here, alongside Whitehall: via recycling, local planning standards (like the Merton Rule), procurement and PPPs (like the ESCOs in Woking and Birmingham). Whitehall matters behind the scenes – for example, through DECC’s new Feed-In Tariff rules.

Green Industries are the sexy, photogenic things politicians get excited about, and are the focus of Labour’s Low Carbon Industrial Strategy, the Conservatives’ ‘Marine Energy Parks’ idea, and the Lib Dems’ green growth plans. Interestingly, the Tories seem keener on Green Places than Labour – see proposals for a ‘green deal’ for households, and support for micro-generation.

My guess is that Green Industries, though exciting, will only take the UK so far. First, only a few places will have them. The range of green technologies is vast. With no global standards, potential for international growth is capped. Most importantly, geographies of innovation, production and sales already differ. Silicon Valley leads the US in ‘cleantech’ R&D – but large-scale manufacturing is already shifting from the US to China and other cheap locations.

Second, the UK is already lagging. In wind turbines – where Britain should be a leader – the top firms are German and Scandinavian. (From this perspective, one of the saddest things about last year’s Vesta dispute is that Vesta is Danish).

Third, policy options are pretty limited. Green industries in the US are supported by Government stimulus money and a massive VC sector. Other European governments have funded producers for years. Britain has plenty of strategy, but limited cash to back these up. Low Carbon Economic Areas have no funding attached, and rely on existing RDA / LA budgets plus local ingenuity. The experience of Science Cities, a similar approach, doesn’t get my hopes up.

The Green Places approach is much more prosaic, but will have bigger impacts on more people. Cities’ carbon footprint is large: the C40 group estimates that worldwide, urban areas represent around 75% of the world’s energy use and CO2 emissions. Fiscally, Green Places largely involves redirecting existing budgets. (Some costs are passed on to firms and households – but councils should be allowed to use tools like TIF to ease financing constraints.)

Finally, British local government is already on the case. The Merton Rule is a classic example of how local policy innovation has shaped national thinking. Woking is a leader in decentralised energy. And Greater Manchester’s LCEA proposals look pretty good, with a five-year retrofit programme, small-scale renewables and smart meters for thousands of households across the city.

The UK needs both green industries and green places. But let’s not get over-excited about the first, while underplaying the second. Green jobs might be more dull than we thought. But they’re important as ever.

The magic roundabout

February 12, 2010

Ah, the perils of place branding. Wired have re-upped their ‘Silicon Roundabout’ story, highlighting the cluster of tech and new media firms around the Old Street / City Road junction in East London (thanks to Eric and Mat for pointing me to it).

The magazine reckons there are now about 85 firms in the neighbourhood, including Dopplr, last.fm and moo.com (who make my lovely business cards). That’s exponential growth since Matt Bidduplh’s original 2008 map. Along the way it’s picked up a Wikipedia entry, props in the FT and a (slightly self-conscious) support group.

 There’s only one problem here. Almost none of the firms are *actually on the roundabout*, or even near it. Look at Wired’s picture again. These companies are almost all down the road in, er, Shoreditch – or in one case, way out in Bethnal Green.

Obviously ‘Silicon Roundabout’ is a good meme (here I am writing about it, after all). And it means people don’t have to say they work in Barley-esque Shoreditch. But it fails completely as a descriptor for a real cluster, or even a spot on the map. It’s also nothing like Silicon Valley, which is a continuous sprawl stretching halfway across the Bay Area, including several cities along the way. Silicon Roundabout is  Trumpton to the South Bay’s Sim City. But that’s another story.

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