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A Tale of Two (Tech) Cities

13/02/15
A Tale of Two (Tech) Cities
Two conflicting narratives are emerging from London’s Tech Cluster

It was the best of times, it was the worst of times. Or so one might be tempted to conclude from the two, wildly divergent news stories last week concerning London’s Tech City cluster of digital businesses.

If you read the Tech Nation report on the strengths of the various UK digital clusters then it is a great time to run, work at, or have invested in a high-tech start-up in Shoreditch. According to this study, inner London’s ‘Tech City’ cluster now employs just over a quarter of a million people – which is significantly more than the combined employment totals of the next four largest UK clusters (Bristol and Bath, Greater Manchester, Reading and Berkshire, and Leeds). Overall, inner London is home to more than a quarter of UK digital firms. These firms are projecting growth at 5.4% over the next year and, of the 45,000 digital-sector jobs currently being advertised, London accounts for almost 2 out of every 5. Tech City, it seems, is booming.

However, if you read the letters page of the Evening Standard on 5 February, you would be forgiven for reaching a very different conclusion: Tech City firms may be booming but they are populated by increasingly frustrated staff sat at their laptops desperately waiting to download documents and apps. Letter writers from Tech City News, crowd-funders Seedrs, and investors Hoxton Ventures joined Mark Boleat of the City of London, and Hackney South MP Meg Hillier to write to complain about Shoreditch’s dire broadband speeds. A day earlier, Islington South MP Emily Thornberry told the Commons that a business based in her constituency – on the edge of Tech City – found it easier to send films by bicycle courier than wait to download them.

According to research by fibre providers Hyperoptic, London is ranked 26th out of 33 amongst European cities for broadband speeds. Worse still, over the past five years – the same period that this Government has been championing Tech City and the digital economy – London has fallen four places in these rankings. Embarrassingly, back in 2012, the Government vowed that the UK would have Europe’s fastest broadband speeds by 2015. Last summer the Financial Times found that just 3.4% of the Government’s £100 million Super Connected Cities fund – designed to help businesses meet the costs of installing broadband connections – had actually been issued to firms.

Whilst much of the blame over slow broadband has – rightly – been levelled at BT, the current Government should be very concerned about the growing criticism emerging from Shoreditch. This Government – and the Conservatives in particular – have made Tech City one of their flagship initiatives and the digital economy is one area where the party has been able to put clear blue water between itself and a distinctly analogue Labour Party. The Prime Minister, the Chancellor and even the Mayor of London have all staked their reputations on its success. If bad press about broadband speeds persists, it may well be these same politicians facing the political guillotine.

James Ford is a Senior Consultant at PLMR, specialising in transport, environment and digital policy. He was formerly the Adviser to the Digital Chamber of Commerce at the London Chamber of Commerce and an aide to Mayor of London Boris Johnson.

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