Britain’s About-Turn To A Silicon Roundabout

*Time* was, UK and European digital entrepreneurs celebrated the continent’s disconnected, disparate digital media ecosystem.

Unbound by the shackles of meatspace, innovators and investors would tell you how cool it was to flexibly build startup companies of no fixed abode, with developers in Bulgaria or Timbuktu, business staff somewhere in England and others in some other far-flung place.

As Index Ventures’ Saul Klein told paidContent:UK in 2007: “We used to say at Skype that our head office was the internet. You have amazing developers from eastern Europe who you either work with in eastern Europe or in London. That’s vastly increased the available talent pool for starting companies.”

It was an antithetical and defiant riposte, from those otherwise enamoured with centralised Silicon Valley, to Europe’s lack of an equivalent tech hub.

But the community has done an about-turn. Just as location-sharing technologies have re-established the primacy of physical space, the digital media sector, too, has sought to coalesce itself around the Old Street/Shoreditch area of east London now jarringly referred to as Silicon Roundabout, a moniker which betrays a continued obsession with America’s Valley, and a self-deprecatory nod to the frequent feature of British roads that is better known in the States as a “traffic circle”.

The area had already organically attracted creative and digital types like, Dopplr, Songkick and Moo, at least as long ago as the Nathan Barley sitcom character was broadcast on Channel 4, a parodical observation of the local subculture.

But, last fall, the roundabout was anointed by the UK government, whose prime minister Cameron, in a speech, noted “the lesson from Silicon Valley” – to create “a grand centralised plan” to “make East London one of the world’s great technology centres”.

This ethos of centralisation flies in the face of the same government’s election commitment to “an unprecedented redistribution of power and control from the central to the local” – a commitment it’s driving through by the creation of an unlikely new UK-wide network of local TV channels and with proposals to hand police control to U.S.-style elected representatives, for example.

In digital, the government’s Technology Strategy Board, a body which finances innovative companies, has now allocated a fund from £1 million in UK taxpayer money exclusively for startups in what is essentially a square kilometer of the capital.

What about the games developers of Dundee, or the digital producers of Manchester or Newcastle, for example? They are rather overlooked now that all roads lead to Silicon Roundabout, Britain’s self-appointed “Tech City” and “answer to Silicon Valley”. This new centralisation is paradoxical both to the government’s localisation ethos and to the old idea that, in online circles, proximity is non-essential.

But clustering is nothing new; it’s a tried and tested economic development strategy used in many a project even outside east London, like Wales’ sector-specific network of Technium centres, its @Wales digital media incubator, the TV production hubs of Salford Quays and Cardiff Bay and, now, London’s own TechHub co-working space, plus investor Steffan Glaenzer’s White Bear Yard facility.

What do the Roundabout’s denizens get from it all? A good after-work social drinking scene, no doubt. But also: “You can help each other if there are some dodgy investors snooping around who have been watching too much Dragon’s Den and want 50 per cent of your company for three quid,” Ben Drury of the Roundabout-dwelling digital music firm 7digital tells TechRadar. “It takes time for a community to build up but it is starting to happen. I am more positive now than any time before in London.”

Alx Klive, founder of web TV startup WorldTV, based his company in London but employs staff in Ukraine. “There is much to be said for geographic proximity and the benefits you get when you have a community of like-minded people with similar goals, working and socialising in the same area,” he tells paidContent:UK. “It’s a greater challenge to operate over distance – it certainly can be done, but you need very good systems to make it work. The main benefit of distance is usually cost, of course.”

But Klive is not entirely sold by London’s Silicon Roundabout. “I think the name is selling a worthwhile concept short,” he adds. “Few in North America know what a ’roundabout’ is, and to North American ears it sounds odd. I get it – it’s us, it’s twee – but these are the areas where we perhaps need to think more globally rather than have a ‘jolly old chuckle’ around what is essentially a colloquial and British term.”