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Can Silicon Valley ever be replicated in London?

26 November 2013

Trying to clone Silicon Valley has been a cornerstone of this coalition’s business policy. Rohan Silva, until recently the PM’s policy guru, spent several years in government and opposition creating the ‘Silicon Roundabout’, an attempt to provide a new leg for the UK’s economy in East London.

Depending on who you believe, the East London Tech City project has either been a roaring success or a waste of time. Despite all the encouragement from the government, the main challenge is recreating the enticement of Silicon Valley in Shoreditch — something that may be impossible. Brent Hurley, a founder of YouTube, spoke on the Today programme this morning about the ethos of the Valley:

‘For me, I think Silicon Valley is more a state of mind, it’s a mentality, among entrepreneurs to look at the world and if you see something they want to change, a pain point, then try to develop a solution or a product to address that. Take your idea and bring it to market. ‘

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Earlier this year, I was lucky enough to travel to the West Coast to investigate what makes the region so special. This little snippet, from exploring the startup community in San Francisco, shows what East London is up against:

‘My second mission was to find some nerds in their natural habitat. Sightglass Coffee is a hip entrepreneurial gossiping shop owned by Twitter billionaire Jack Dorsey. People drink strong lattes (ordered using iPads, naturally) while boastfully discussing ‘where our next million will come from’. The techies here — all skinny red trousers and lopsided haircuts — could be from east London, although in Shoreditch this kind of talk would be pure fantasy, fuelled by seven pints. In California, these conversations are actually serious. “I don’t even know what it does, but it’s something to do with HTML5,” said one gaggle of bores. “But it’s only a matter of time before Google show up and we’re set for life.”’

Having a business community based on an ethos is always in danger of loosing its edge. Hurley doesn’t think Silicon Valley is becoming another New York — ‘there are certainly big tech companies, but there’s always up and coming ones’ — but believes California will remain at the forefront of technology startups the near future:

‘There’s always been a sunshine tax in California. Taxes in California are one of the highest states all across America…but for startups, the constrained resource is just technical talent, and Silicon Valley in California has the highest concentration of that. If you’re looking to build your team of smart folks, you’re going to do that in California. Even if the taxes are incrementally higher there.’

So, where should the UK go from here? On Thursday, the next Spectator debate will be exploring this whether the UK is capable of producing the next Facebook. We’re delighted to some of the most knowledge figures on the matter speaking, including the Prime Minister’s ex-advisor Rohan Silva, the culture minister Ed Vaizey and entrepreneur Julie Meyer. Find out more information or book tickets now.

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Show comments
  • markzawacki

    short answer is ‘no’. For a start, comparing startup activity of Silicon Valley to anywhere else (Shoreditch, New York, etc.) is pure folly. What Silicon Valley has that no other tech ecosystem has is fivefold: (1) critical mass of serial acquirers, (2) critical mass of serial disruptors, (3) 10+ non-tech industry verticals have formed, (4) it’s very large, very open and very weird, and (5) it’s the epicenter of the mobile industry globally. More here:

  • RavenRandom

    No you can’t replicate what the Americans do. It’s in their nature to take large risks, for large rewards, they fail early and often. It’s a cultural thing. Nearly all the great and giant new companies are American.
    The American dream of working hard and owning your own company really does exist, it motivates the population. Here if you’re successful the Govt and opposition wonder how much tax they can take off you, or if it’s “fair” you’ve got money. That’s not an environment that encourages risk taking.

  • AnotherDave

    The Daily Mail is the most popular english language newspaper website in the world.

    • dalai guevara

      Is that a joke? If it is then that’s a joke.

      • JabbaTheCat

        Check out the viewing stats for the DM website if you don’t believe him…

  • Horation Nelson

    No, because when genuinely innovative companies, like Wonga for instance, set up shop in the UK, they get attacked from all sides. Money is still a dirty word in the UK. And people are too afraid to embrace capitalism wholeheartedly. The West Coast of America was founded by intrepid, fearless frontiersmen; this spirit prevails today. The timid, fearful ones stayed behind in Europe. Peasants in mind, body and spirit.

    • Colonel Mustard

      Britain is increasingly a socialist state in fact if not in presentation.

      • Horation Nelson

        Indeed. It’s very disheartening to see. I must admit, I do blame the BBC, to some extent, for its extremely soggy discussion of these issues.

        • dalai guevara

          The BBC? The state-owned broadcaster opposing the propaganda of the foreign owned RT, Murdoch press and CCTV all across the globe?
          The socialism of socialising losses but not the profits of what ought to be publicly-owned assets, as they deliver essential public services?
          The socialism of growing the state to such a size, it now requires privatised Quangos in every part of public life to deliver?
          The socialism of privatising the NHS, with no proof whatsoever that this would either deliver better standards in care nor any savings whatsoever?

          I mean seriously, what kind of socialism are you chaps tirelessly referring to? You’re not describing socialism, you are describing a big state comprising of private hospitals, the RBS and their ilk and one quadrizillion Quangos RELYING on public funding.

          Stop the funding! Do some work yourself. The state owes you nothing.

          • Horation Nelson

            Exactly my point. The BBC has always taken it upon itself to denigrate and undermine private enterprise.

            • dalai guevara

              Not a point well made then.

              There are things that do not belong in the private hand, as they are not designed to deliver the best outcome for the public. We have a diverse media landscape in Britain. Just look at the BBC studios in Salford, state-owned studios on the one side, and a quadruple number of anxilliary facilities supported and supporting that backbone. Yes, supported and supporting. Do YOU know which part is bigger? Go on, elaborate. Give it your best shot, matey.

              • Horation Nelson


                • dalai guevara

                  That was your best shot? Why did I bother make my point twice. To have the last laugh perhaps.

                • Horation Nelson

                  In the words of the great heroine of Silicon Valley: “Reason is not automatic. Those who deny it cannot be conquered by it. Do not count on them. Leave them alone.”

                • dalai guevara

                  I will not deny the validity of the statemant of your “heroine”.
                  What I am asking you to do is keep a proper tap as to what is public and what is in fact private.

                • Colonel Mustard

                  It’s your tab. You tell us. And make it clear.

                • dalai guevara

                  Ok, the BBC only for now.
                  How many private concerns rely on the BBC (i.e. the taxpayer) to produce and sell their goods? How many production companies flourish in immediate proximity to the state run affair? How many top execs and presenters are in fact paid via private companies, not the state payroll? Why? That’s a taxpayer subsidy of private enterprise right there!
                  Now you do the maths, it’s not my issue, it’s yours.

                • Guest

                  Well mon colonel I hope you understood that because I’m still none the wiser and he was telling me to ‘keep a proper tab’.

                • dalai guevara

                  yup, be my dear public private quango guest, keep a tab or shush forever. It’s your claim that the state was ‘big’, not mine. Who’s the feebly bodied and weak-minded peasant now, printing $85bn A MONTH?
                  One down vote only for this US-American provocation? Jeez Louise.

                • fozz

                  Well I hope you understand dg’s reply below because I’m none the wiser and he was telling me to keep a proper tab.

                • Colonel Mustard

                  Point? There is seldom a point to your blunt and incomprehensible bull-nosed and blubbery prose.

            • fozz

              And a classic of this was their programme last night rubbishing the Amazon business model. They just don’t seem to get it that online retailing means that someone somewhere is going to work bloody hard for peanuts so that people including cynical, feather-bedded BBC journos with their armchair lefty mindsets can get stuff delivered to their door. That’s a feature of 21stC life. Live with it. Would they rather internet retailers were banned or perhaps regulated by a Department of Shopping?

              • dalai guevara

                Pay your taxes dude. Let’s see how competitive you really are.

                • fozz

                  Sorry, like some other posters I fail to comprehend your thought process.

                • dalai guevara

                  I have explained where public is in fact private.
                  I have pointed out that private competitive advantage (that you cherish?) is often due to a tax advantage.
                  Keep a proper tab, then we’re talkin’.

              • Horation Nelson

                Yes. They’ve been cosseted by the license fee for too long.

              • RavenRandom

                Department of Shopping? Don’t give them ideas.

          • Liberty

            This is crap.

    • Makroon

      Cobblers. The “unique” feature of Silicon Valley, is how much they love themselves and worship the “Silicon Valley brand”. There are clever entrepreneurs all over the world, we have more than our fair share, despite the dead hand of the EU and our appetite for being nasty to self-made men and talented immigrants.
      There is a fetish about “tech”. Let’s see what happens now that the “tech revolution” is reaching middle age.

      • Horation Nelson

        There’s far more to entrepreneurship than just being “clever”. Silicon Valley is almost unmatched in its appetite for risk-taking, market-making and resilience to failure. That attitude exists in perhaps one other place in the world right now: Israel.

        Europeans, whilst intelligent and educated, are far too risk averse and too quick to punish failure. It will always hold them back.

        I read a pithy quote some time ago that said if Larry Page and Sergey Brin had been French they would be in academia. Because they were in Silicon Valley, they started a company and made billions.

    • lozerama

      Quite so, we need more “intrepid, fearless frontiersmen”, aka immigrants.
      What moderate success has been achieved at silicon roundabout wasn’t delivered by home grown techies, but by immigrants.
      The secret of each silicon roundabout success story always traces to an inner core of super-talented immigrants, locked into the employer by a work permit, and earning peanuts until they get residence. I’ve seen them weeping not to be sent back to “bongo-bongo land” when the home office messes them around with their paper work.
      The home grown propeller heads own the businesses and claim the kudos, but they don’t think of the products or deliver the services. They just know how to wangle the “bongo-bongo land” visas and marshal the cheap labour.

  • Colonel Mustard

    Might have been better to replicate it outside the bubble. Somewhere north of Leicester say.

  • Tom Tom

    Europe spends zilch on Defence R&D which is why it has no technological lead

  • Tom Tom

    Of course just as Leicester or B’ham University invented LCD displays to meet the demand of the MoD so putting huge funds from the MoD into R&D will yield results as it does through DARPA in the USA.

    Silicon Valley was built on Defence Contracts ever since Hewlett and Packard got their first orders. Without DARPA there would be no Silicon Valley just as there would have been no transistor without Bell Labs, no transistor radio without Sony, no calculator without Bowmar meeting the demands of a Japanese customer, and no DRAMs without texas Instruments the major defence contractor.

    • Satz

      There’s a interesting video on Youtube called secret history of Silicon Valley the speaker talks about what you mention here. Also remember the great risks that where taken by people like Robert Noyce who was part of Fairchild Semi Conductor which paved the way for all the other startups. It was a culture of quit work and start up a business. Something that is very very difficult here

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