‘Tech City’, with its epicentre on Old Street roundabout, was supposed to be the UK’s answer to Silicon Valley – hence its nickname, ‘Silicon Roundabout’. However, despite a great deal of initial excitement, it has never come close to emulating its US namesake.
To find out why we spoke to Martin Warner. Martin is a serial tech entrepreneur who achieved a $50m holy grail exit in less than 18 months as the founder of the 3D printing business, bot Objects and is a Tech London Advocate. He is also the founder and CEO of Entrepreneur Seminar, an education and mentorship programme which has supported thousands of entrepreneurs.
Working between the UK and US, and having successfully built businesses in both markets, he is well-placed to dissect why Britain has failed to supercharge its tech scene.
He explains: “What the UK failed to do with Tech City is truly commit to the idea of building a cluster. The wisdom of the day was that intervening in the growing number of start-ups in Shoreditch would stifle innovation, that you cannot create a cluster from top down. The reality, though, is that if we want to encourage investment and grow certain sectors then we have to provide a favourable environment for that with the right incentives.”
This was not the approach taken for Tech City, though. There were limited tax breaks provided for businesses. Under the 2010-15 David Cameron government the main tactic was essentially a PR campaign, promoting the stories of successful start-ups in the area in the hope it would become a self-fulfilling prophecy. Create the illusion of Tech City being a successful cluster, and that’s what it will become.
However, Martin argues more was needed: “You cannot simply wish an industry to success. There was no real reason to base yourself in Tech City, it might as well have been in Mayfair! There needed to be far more co-operation between the start-ups on the ground and the government to create policy that has real time effect.”
He continues: “Rather than blanket tax breaks, central government had to sit down with business leaders to thrash out hyper-focused policies that were going to encourage growth. Look beyond simple tax breaks; regulation, infrastructure and law-making all need to be specifically tailored to the tech industry within the cluster you are trying to create. That is how you incentivise innovation. That is how you build confidence.”
Martin argues that this is not just the case in the tech industry either: “Slashing taxes across the board does not work. We learnt that with Liz Truss’ failed experiment. Central government needs to decide which sectors are going to be the future of the UK economy and work with them to create an environment to make that possible. Hopefully this is something Rishi Sunak can bring to his premiership, as a technocrat.”
Whilst the dream of the UK’s very own hub of tech innovation has been rumbling since Cameron’s days, it is by no means too late to make a reality, he believes. “Despite these trying economic times, I have seen no reduction in the appetite of young entrepreneurs to innovate and start business. In my work with Entrepreneur Seminar, take-up is high as ever and the entrepreneurs I mentor are ready to break into the industry. This is not the time to turn the taps off. The government must continue to promote growth and maintain confidence in the ability to start a business.”
Whilst the moribund Tech City may not have been a roaring success thus far, that does not mean it cannot be. Martin’s clear view is that the government needs to lean more into it, not back away now. By working with industry leaders to create a targeted policy that will directly improve outcomes for tech start-ups in the area, prosperity and the creation of a cluster can still be possible.
Featured Photo by CHUTTERSNAP on Unsplash
