Posts Tagged ‘silicon roundabout’

Big data and digital firms

July 23, 2013

(C) 2013 niesr and growth intelligence

I’ve just published some new analysis of the UK’s digital economy, joint with Anna Rosso and Growth Intelligence, and funded by Google. We had a launch session yesterday with Vince Cable – see here for a good write-up by the Guardian.

We’ve done pretty well for media so far: see coverage from the BBC, FT [£], Sky, Telegraph, Independent, Scotsman and Guardian (again) among others, and a nice blog post from Google’s Hal Varian.

*

This is the first phase of a research programme with roots in the resurgence of industrial policy around the world. Like many others, the UK government wants to promote ICT and digital content activities – in the global North at least, this is generally high value activity, with spillover effects to the rest of economy.

A big problem is that we have little idea of the true size and nature of these digital companies. That’s because official definitions use SIC codes, which don’t work well for companies doing innovative, high-tech stuff.

To try and fix this, we use big data provided by Growth Intelligence. GI pull in data from the web, social media, news feeds, patents and a range of other sources, and layer this on top of public data from Companies House. That gives a much richer picture of who’s out there, their characteristics and their performance.

Crucially, GI’s data buys us a lot more precision than SIC-based analysis. We can look at industries and at products, services, clients and distribution platforms.  For increasingly tech-powered sectors like architecture, that allows us to distinguish ‘digital’ companies producing (say) CAD specialist software from ‘non-digital’ ones making buildings.

*

Overall, we find over 40% more digital companies than official estimates suggest. We also find that digital companies who report revenue or employment are pretty resilient, with faster revenue growth and higher average employment than non-digital companies.

And contrary to the popular sense that it’s all about London start-ups, we find hotspots of digital activity across the country, including some perhaps surprising places like Aberdeen, Middlesbrough and Blackpool.

*

Okay, this is all fascinating stuff for researchers. But what should Government do differently? First, the big data field is still in its early days, and we’d encourage officials to explore how it can complement conventional statistics. Second, better data should lead to better-designed industrial policies. Finding the optimal policy mix, however, is a separate and much harder question to answer.

BIS’ information economy strategy is rightly cautious about hands-on intervention. This NBER paper by Aaron Chatterji, Ed Glaeser and Bill Kerr is a good overview of the wider evidence. Henry Overman and I will be publishing a piece in the Oxford Review of Economic Policy soon too, which puts the case for a more agglomeration-focused approach.

We’ll also be continuing the data analysis, thanks to further support from NESTA. Look out for further mapping and econometric work in the months ahead.

That’s not my name

January 30, 2013

(c) wired / architecture 00

Last week I was at LSE for a seminar on place and neighbourhood branding, ably organised by CityDiplo. Also on the panel were Suzi Hall (LSE Cities) and Ian Stephens (Saffron). It was a great evening, with a sharp and highly engaged audience.

I ran through some new work on the politics of naming in East London’s digital economy, and how the competing brands of Silicon Roundabout and Tech City are playing out on the ground (which I’m writing with Emma Vandore and Georgina Voss).

Suzi gave a great run-down of her work on ordinary streets and vernacular spaces in South London, and Ian delivered a nice overview of official branding strategies for Nine Elms.

The CityDiplo team have now put up a podcast of the session. Presentations should follow shortly.

From Tech City to Smart City?

December 18, 2012

(c) Cleanweb UK

Is Silicon Roundabout going green? I’ve written a new piece about London’s emerging ‘cleanweb’ scene, highlighting some of the fascinating new firms and ideas emerging from the area.

You can read short versions on the Huffington Post and the SERC blog. The piece was commissioned by LSE Cities, and the full version is in the LSE Cities ‘Electric City’ conference newspaper.

It all builds on the Centre for London report A Tale of Tech City, which came out over the summer.

*

I’m starting to write all this up into a journal article or articles – so comments are very welcome.

A Tale of Tech City

July 3, 2012

We launched A Tale of Tech City yesterday at Google Campus. It went very well – lots of robust discussion, and happily, general acclaim for the report.

The Centre for London project is joint work with Emma Vandore and Rob Whitehead, and takes an unvarnished look at the East London digital ecosystem.

*

We ran a lot of numbers. By crunching the BSD, the best data there is, we find the East London scene is a lot bigger than anyone thought – at least 1500 firms (a conservative estimate), probably more like 3300 (drawing a wider line).

We also did seven international case studies to see how London stacks up in global terms. (Hint: Silicon Alley, not Silicon Valley.)

We then went out and did in-depth interviews with a lot of local firms, plus others working in finance, workspace and policy.

We identify six challenges for East London businesses, and make suggestions for tweaking the strategy and policy mix. In particular, we argue for a stronger focus on business development, helping young London firms become global players – and for Government to temper expectations for a new cluster in the Olympic Park. These things can’t be masterplanned.

*

Those messages got the thumbs up from GLA Deputy Mayor Kit Malthouse, Hackney’s Guy Nicholson, Unruly’s Sarah Wood and from Matt Biddulph, who all joined me on the platform. The Tech City Investment Organisation is now running with some of our ideas – see here – and there are signs of an Olympics Media Centre rethink too.

You can download the whole thing here.

We’ve had pretty good press so far, with coverage on the BBC (here and here), Financial Times, Wall St Journal, Guardian and the Independent … plus a nice write-up by Richard Florida in The Atlantic.

*

I’m now starting to think about further work. Two promising avenues are looking across the digital economy in the rest of London, and exploring NY-LON in depth – there are some striking parallels between the London and New York scenes. Get in touch if you’d like to talk about either of these.

Busy

May 24, 2012

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 …

Future chat

February 23, 2012

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

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.

*

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.

*

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.

*

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.

*

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.

*

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.

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.

*

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.

*

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.

*

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.

Follow

Get every new post delivered to your Inbox.

Join 57 other followers

%d bloggers like this: