Jennette Arnold
London assembly member for North East London — fighting your corner at City Hall
Tech City – Located in my constituency is the emerging cluster of digital and creative industries that span an area from Old Street/Shoreditch across inner-east London

Tech City – Located in my constituency is the emerging cluster of digital and creative industries that span an area from Old Street/Shoreditch across inner-east London

What is Tech City?

Tech City refers to the emerging cluster of digital and creative industries that spans an area from Old Street (“Silicon Roundabout”) through Clerkenwell, Dalston and down to Hackney Wick and the Olympic Park. The agreed centre of the cluster is Old Street/Shoreditch from where firms have spread across inner-east London since the late 1990s.

In the final months of 2010, the coalition Government turned its attention to this emerging cluster and developed a range of initiatives aimed at supporting its growth and development; initiatives which have seen varying degrees of success. The term “Tech City” is a brand name attached to the area by the coalition in an attempt to rationalise an unorthodox conglomeration of SMEs into one cohesive entity for the purposes of marketing for foreign direct investment (FDI).

Prior to 2010, “Silicon Roundabout” (as it was then known) was a policy area that was slowly creeping its way up the political agenda.  Since David Cameron’s visit and tech policy launch that year there has been a sharp increase in interest from policymakers, academics and business leaders. Its significance in relation to driving national economic growth was enhanced when it was reported that George Osborne regarded the project as his “industrial strategy”. This approach will concern entrepreneurs who see Tech City as an organic construct free from government interference and who will dislike attempts by the coalition to “own” it.

The businesses themselves consist of an eclectic mix of advertising agencies, web and software developers, post-production facilities, data management and game developers. These tech firms sit alongside a range of other industries that broadly fit within the “creative industries” tag.

It’s important to recognise these industries for what they are:  a closely interconnected web of tech, creative, service and retail firms that are dependent on each other for their continued existence and success. Without the tech expertise the creative sector would not want to locate in the district. The “creatives”, such as fashion houses, feel a natural affinity with the web designers and use their services for the marketing of their products. Likewise, the retail offer such as Boxpark in Shoreditch along with the bars and clubs would not exist on anything like the same scale if the cluster wasn’t there.

This “ecosystem” must also be understood as much as a business community as a new social movement. Although not formally codified there are a series of values which run through this socio-economic phenomenon. It is an extraordinary mix of social liberation, neo-liberal economics and the free exchange of ideas. At a social level, many firms operate in shared work spaces, exchanging ideas and capital. This is as far removed as is conceivable from other ultra-competitive sectors such as financial services. Co-operation runs through the veins of this sector. The free exchange of ideas is another cornerstone of these industries. Many tech-based firms create products which utilise the mass of public data available to them.

The London Datastore is an example of freely available government information which is used as the basis of apps and software programmes. Live information apps carrying bus arrival times are one prominent example. As such, the publication of freely available data has long been a clarion call of the sector.

The transient nature of these firms, combined with their temporary workspaces and “phoenix from the ashes” cycle of entrepreneurs founding, running and then selling them before starting all over again two years later, make assessing the size of Tech City an almost impossible task.

One of the core problems for policymakers, investors, journalists and industry outsiders is making sense and understanding the phenomenon that is Tech City.  However, there are five core facts about the “Tech City” phenomenon:

  1. The most recent audit produced for the Centre for London’s Tale of Tech City report identified a conservative estimate of a doubling of digital firms in the Inner East London area from 1,591 in 1997 to 3,289 by 2010.
  2.  The same report identified that the number of digital economy jobs in Inner East London increased from 8 per cent to over 12 per cent between 1997 and 2010.
  3.  There is significant overlap between the digital and creative firms operating in the district. Recent mapping of 774 core firms concluded that whilst 16% were engaged in digital marketing, nearly 60% are creative tech firms specialising in 3D and animation works.
  4.  There is an emerging clear demographic grouping for the average Tech City employee. Most are in their 20s and 30s, educated to degree standard and often above, predominantly male and mostly British born. Anecdotal evidence would suggest the demographic is politically liberal and noticeably different in their political outlook from your average SME employee.
  5.  The informal workspaces and bohemian business culture might lead you to believe that this is not an area where big money is made. This is far from true. Some of the sectors’ big names are based in Tech City, including Last.FM, SoundCloud and TweetDeck. The latter was recently bought by Twitter for £25 million.[1]


[1] Points 1-5 from A Tale of Tech City: The Future of Inner East London’s Digital Economy by Max Nathan, Emma Vandore and Rob Whitehead (2012) http://www.demos.co.uk/files/A_Tale_of_Tech_City_web.pdf