The light will go out in Tech City, warns Hannah Blacklock, unless the creatives take a stand against corporates.
The number of businesses located in the Old Street area known as Tech City, has fallen by a third in the past year alone. From March 2014 to March 2015, the number of registered companies in the area declined from 15,630 to 10,280 – more than 5000 down.
Hardly the sign of a thriving hive of tech-trepreneurs. Or is it? Perhaps it is the lure of the area which has raised the rents, intensified the competitive atmosphere and weeded out weaker elements.
Here’s the conundrum: the number of businesses in Tech City is down for the second year running. But the area still tops the tables for the number of new business being set up there.
As ‘credit crunch’ turned to full-blown recession in 2009-10, Tech City was set to take us out of the downturn. Initiatives such as the Seed Enterprise Investment Scheme were meant to put this part of London – affectionately known as ‘Silicon Alley’ – on the same global map as California’s Silicon Valley and China’s Shenzhen region.
Old Street and surrounding districts (Shoreditch, Hoxton, Brick Lane) certainly acquired a reputation for quirky inhabitants and innovative commercial ventures. With venture capitalists seemingly queuing up to put money in to the creative hub of London, it sounded like a real success story.
Perhaps what’s happening now is only a rationalisation of recent developments – streamlining the whole area and preparing it for the next step up, by cutting out the less lucrative enterprises which cannot afford the steeply rising rents. In which case, weaker businesses being forced to shut down or move on, is a sign of creative energy – what Joseph Schumpeter called it ‘creative destruction’. And no doubt Schumpeter would have added that you cannot have ‘creative industries’ without this.
On the other hand maybe the wheel of fortune has already turned against the ‘creative hub’? Veterans of the turn-of-the-century dot.com boom remember something similar happening down the road in Clerkenwell in 1999-2001: first, widespread declarations of a new economy, before it fizzled out with many ‘smart’ people losing big chunks of real money.
As I see it, in today’s situation, the problem is not made by the creatives; it’s the corporates moving into the area, snapping up some of the talent and suffocating the rest, before it’s had a chance to grow.
Platforms that initially set out to help nurture and support the underdog are now forced into chasing the money, not the creativity, so as to ensure their own economic future.
Creativity is still there, trying to flourish; the problem lies with the large firms wading in on the action. The small start-ups that helped found this East London tech boom, and those that were originally attracted to the area, are now being pushed out. They cannot afford a financial fist-fight with big money corporations.
So come on creative tech-heads, those of you who stand for the unconventional, for innovation and passion. Who challenge the norms. Who stare in the face of Canary Wharf and laugh at its suits and briefcases. Who chose this side of the skyscrapers in order to stay out of such a monotonous, uninspiring system.
You still have the potential and the opportunity to do something different, to back the guys you genuinely believe in, the guys with the indisputable passion, bright ideas and unbreakable motivation.
The guys that backed you back in 2008, when this creative tech industry was nothing more than a barren roundabout in the middle of Old Street.
So try and get back to that, before they go elsewhere.