Busy

It’s a sad day. I’ve become one of those people who makes excuses for not blogging.

I have got some good reasons though. These are:

1) I’ve been getting some papers into journals.

A version of my PHD intro chapter has been accepted by European Urban and Regional Studies.

And my paper with Neil Lee on cultural diversity and business performance has been accepted by Economic Geography.

I’m pretty happy about both of these. Fingers crossed for a third which is still out for review.

2) I’m finishing up a couple of other projects.

One is a paper on proximities and collaboration, with Riccardo Crescenzi and Andrés Rodríguez-Pose. We’re interested in how physical, institutional, social and other ‘closenesses’ might shape how people work together (or not). You can see an early version of this here [pdf], from a  presentation I gave in Leuven the other week.

The other is some research on Tech City, which I’m doing for the Centre for London. This is joint work with Emma Vandore and Rob Whitehead at CFL. We’ve been talking to a lot of East London tech firms, and crunching microdata to trace the cluster’s long term growth and dynamics.

You can hear some early thoughts on the Future Human podcast – look for the ‘Liquid City’ episode. The report itself will launch on 2 July at Hackney House.

On which note, back to writing …

London’s economics of diversity

I gave a talk on my diversity and firms research at LSE London on Monday. You can now read summaries on LSE’s British Policy and Politics blog and the SERC blog.

LSE London have also posted up the slides and a podcast. I hope they’ve included the bit at the beginning where Powerpoint stops working …

The paper’s been picking up some interest – thanks to The Economist’s Free Exchange blog – and you can read the whole thing here if you so wish.

Future chat

I’m giving a couple of seminars in the next few weeks.

First up, on 5th March, I’m at LSE London talking about cultural diversity and the London economy. This will draw on some of my PHD research on the economics of diversity. It turns out diversity and co-ethnic networks are good for London businesses; the broader effects of immigration on labour markets more mixed. I’ll talk about these results and the policy lessons. Details here.

Next, on 7 March I’ll be giving a talk on Tech City at UCL’s Bartlett School of Planning. I’ll be discussing emerging findings from a project on the East London technology cluster, which I’m leading at the Centre for London. Only a few people are looking at this stuff, so I’m excited to be working on it. I’ll be looking at international experience, what the numbers tell us, and feeding back some of our conversations with local firms. Details here.

If you’re around, come and say hello!

Tech City at City Hall

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

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.

What’s the point of Outer London?

I left today’s LSE/Demos Outer London seminar scratching my head. What is ‘Outer London’ for? It doesn’t make much sense – except as a voting bloc. Given we’re less than a year from Mayoral elections, though, perhaps that’s the point.

Here are some brief thoughts from the day. (Disclosure: I’m affiliated with Demos’ new Centre for London, but these views are my own.)

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There are different ways of thinking about cities. Planners focus on systems and zones. Economists think about markets, and clusters of people and firms. Sociologists look at communities, neighbourhoods and relationships. In practice, we need all of these lenses to understand real world places.

London has many distinctive features. For now let’s pick two. First, it’s a ‘city of villages’ – over time, the capital has emerged from dozens of small centres merging in a single urban mass. Second, it’s a mega-city-region. London’s economic system spills over political boundaries and across much of Southern England.

Given this, drawing lines around bits of London is a bit of an arbitrary exercise. Using official definitions of ‘Inner’ and ‘Outer’ London to make policy is actively unhelpful. 

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This became very clear during the morning. Demos’ Paul Hildreth took a classic systems approach, tracing links between Outer London and the rest. But his slides demonstrated just how hard this is to do. Data on people flows, industry mix, residence types and productivity all show how interconnected the London system is. 60% of Londoners live in the outer Boroughs, but most don’t stay there: commutes within Outer London make up less than a third of total journeys. 

Alan Mace from LSE London took a communities angle, presenting some very rich data on three outer boroughs. These showed some classic suburban features – stable populations and a strong sense of belonging. But it’s not clear these neighbourhoods are distinctively different from inner suburbs like parts of Hackney or Islington – or that similar to other outer communities. In the Q&A, it became obvious how heterogenous ‘Outer London’ neighbourhoods actually are.

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 As Scottish law would say, Outer London is ‘not proven’ – either as an economic space or a state of mind. But it does work in political terms.

Boris won the 2008 Mayoral election largely on the basis of outer boroughs’ votes. Ken, learning from past mistakes, began his 2012 comeback bid in Croydon. No surprise that Boris is re-launching the Outer London Commission less than a year before the vote, with £10m to spend on Outer London town centres before May (and £40m after).

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What does this mean for policy? The political imperative means Outer London features heavily in the new London Plan, which launches on 11 July. Economic and social realities mean there are tensions in the Plan’s overall strategy, and in the gap between policymaking and impact on the ground.

On strategy, the Plan has a welcome focus on thinking across ‘mega-London’, and identifies high-growth development hotspots across the capital. But it then goes on to set out a number of Outer London-specific policies on the economy, transport and quality of life.

On impacts, OLC chair Will McKee rightly said at the seminar that planners can’t turn market forces around, and need to work opportunistically within the business cycle. So given the deep trends taking retail off high streets and onto the internet, what can the OLC’s £50m town centre fund actually do? It is unlikely to have more than a marginal effect on retail employment. Better, as Mary Portas suggests, to take a hard look at how shopping behaviour is changing – then intervene where sensible to help high streets adapt. 

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Outer London is driven by electoral realities, more than economic or social truths. Let’s hope the next Mayor, whoever they are, recognises which of these is the best basis for policy in the capital.

Londonism

 Die Zeit has just published a big feature on London as high-powered, on-trend, chaotic world city. There’s a quote from me, plus a cinematic passage in which the journalist and I wander around Hackney Wick before stopping off for a latte.

Also featured are Boris Johnson, Mark Kleinman from the GLA and a grumpy-sounding Hanif Kureishi. You can read the whole thing here. Or for non-German speakers, there’s Google Translate.

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ps more fame: in case you missed it, the Guardian have done a nice writeup of my Munich / Silicon Valley report.

More new stuff

I’ve put out a bunch of new academic and policy stuff in the past few weeks. Fresh from the ideas workshop, here it all is …

LSE’s Spatial Economics Research Centre has just published three of my phd papers in their working paper series. They are:

1) The Economics of Superdiversity [link]

2) The Long Term Impacts of Migration in UK Cities: Diversity, wages, employment and prices [link]

3) Does Cultural Diversity Help Innovation in Firms? Evidence from London (with Neil Lee) [link]

I’ll be presenting paper no.2 next month at the big NORFACE/UCL migration conference in London and at the RSA’s 2011 conference in Newcastle.

I’ll also be talking through all three papers (and discussing Richard Floria) at the AAG 2011 conference in Seattle in mid-April. If you’re there come and say hello!

More importantly, the UN Environment Programme launched a huge piece of work on the green economy a couple of weeks back, with a globally-streamed event in Nairobi and much other fanfare. This includes a report on Cities in the Green Economy [pdf], published by an LSE Cities team (including yours truly). LSE also did a sister report on Green Buildings [pdf].

You can read the whole lot, and some summary papers, on the Green Economy microsite.

Why Tech City is like Fight Club

‘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.

How did London get away with it?

A lot of people predicted London would be hit hard during the recession. In fact, London did better than the rest of the UK. Why?

Henry Overman, Director of SERC, delivered the answer at the first LSE Works lecture last night (with some help from me on numbers, trends and jokes). In case you couldn’t make it, here’s a post on LSE’s Public Policy blog which gives the main story.

LSE should be putting up a podcast in the next couple of weeks. Watch out for that here. Meanwhile, the next event in the series is CEP Director John Van Reenen, on ‘Where is Future Growth Going to Come From?’ That’s on 17 February.

In March we have both Lord Stern (on the low carbon economy) and Bruce Katz from Brookings Metro Program (on the ‘next urban economy’, some joint work with me and colleagues at LSE Cities).