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Universities can help spread the Tech City effect

The explosive growth of East London’s tech industry has lessons for the whole country, says Sue O’Hare.

On 4 November 2010, Prime Minister David Cameron visited Brick Lane and gave what has become known as his Tech City speech. “Something is stirring in east London,” he declared, and it had the potential to become “one of the most dynamic working environments in the world”.

Three years on, east London’s tech cluster continues to grow explosively. According to a survey released this July by the aptly named accountancy firm Hacker Young, the year to March 2013 saw 15,720 start-ups launched in the EC1V postcode area known as Silicon Roundabout, making it Europe’s fastest-growing tech cluster.

The government can’t take all the credit for that, but initiatives such as the Technology Strategy Board’s Tech City Launchpad have helped to build the ecosystem from the bottom, and efforts to attract big corporations such as Google have had an impact at the top.

From my office at City University London, on the western border of Tech City, it’s clear that something big is happening, changing London and even the UK as a whole.

One difference between Tech City and other clusters, such as California’s Silicon Valley or the hotspots around the Cambridges in England and Massachusetts, is that it has grown independently of a university. But the buzz has attracted students and academics to our university—in obvious areas such as business and computer science, but also in departments from music to journalism.

It’s not always as easy as it should be for universities to build links with local business. As PraxisUnico’s response to Andrew Witty’s recent review of universities and growth noted, the supply and demand elements of innovation both need a boost. On the supply side, universities must be encouraged to work with innovative small and medium-sized businesses—drivers of economic growth that the UK is relatively poor at producing. And on the demand side, it’s important to promote business collaborations with universities.

But, through a mixture of push from us and pull from companies, our university is now getting involved in projects such as City Unrulyversity, which involves our academics giving lectures on issues confronting start-ups at the offices of online marketing agency Unruly. Anyone who attends five sessions can talk to the university’s Cass Entrepreneurship Fund about obtaining seed funding. And earlier this year, in partnership with brands accelerator The Bakery, we launched The Hangout, a space for student and academic entrepreneurs, stocked with the obligatory free coffee and ping-pong tables, next to the Old Street roundabout. 

That’s great for us, but what about the UK as a whole? Partly it’s a question of leading by example. Tech City is in the vanguard of a more dynamic approach to business. More people want to be entrepreneurs and are willing to take the associated risks. Another tech cluster is emerging in Croydon, and hi-tech start-ups are spilling out of Shoreditch to wind up further east or south of the Thames.

Not everything is perfect. Tech City sits at the boundaries of Hackney, Islington and Tower Hamlets, which contain some of the country’s most deprived areas. So far, little of the benefit has trickled down, but there are a number of projects aimed at raising awareness, building practical skills and providing routes into work. Our university, for example, is collaborating with the TeenTech initiative on an event later this month that will bring 480 teenagers from London schools face to face with local companies and universities in the Copper Box Arena at Queen Elizabeth Olympic Park.

In the future, access to finance may put a brake on growth, although those on both sides of the equation are getting smarter when it comes to connecting money to opportunity. The Tech London Advocates group, which formed earlier this year to connect start-ups to larger businesses and investors, has more than 350 members.

More serious is the skills shortage. In his 2010 speech, Cameron announced a visa for entrepreneurs that would let “the whole world know that Britain wants to become the home of enterprise and the land of opportunity”. This September, the chief inspector of borders and immigration reported that the scheme had been swamped by overseas students no longer eligible to work in the UK, resulting in a backlog of more than 9,000 applications.

The Witty review stressed the importance for regional economic growth of understanding a locality’s comparative economic advantage. In March, the Tech Country report from the British Private Equity and Venture Capital Association looked beyond London in search of the UK’s technological future. Both made clear the fundamental role played by universities and the need to increase the support they provide for clusters.

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Sue O’Hare is director of enterprise at City University London, chairwoman of PraxisUnico and a non-executive director of TeenTech CIC.