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Summary:

The British government’s constant adulation of the London startup scene reached its culmination this week with the news of a huge new redevelopment project. But the reality is that many of Britain’s smartest innovators are locked inside government and the rest look increasingly like poseurs.

Joanna Shields

Updated: The big news in London this week was the announcement that the government was pumping £50 million, or $80 million, into rebuilding Old Street, the startup-heavy area at the heart of what some call “Silicon Roundabout”. The great and good turned out to hear — yet again — how the British authorities were putting their weight behind the cluster of tech and web companies circling around East London.

Listen to the noises coming out of the local companies, and it’s clear that they feel good about this. Former Facebook executive Joanna Shields, now working for the government’s Tech City organization, said it would help turn a “vibrant community” into a “global leader in tech innovation”. And the head of Google Campus, the internet giant’s local bridge-building effort, said it would “help to establish London as a global center for tech entrepreneurs”.

London’s time, you’d assume, is now.

But here’s the message I took away from it all: it’s time to step things up.

Promised unfulfilled

Britain’s government has been one of the biggest cheerleaders of London’s nascent startup scene over the last few years. While the Old Street area has been a center for the country’s digital economy ever since the birth of interactive media, the decision to create an official “Tech City” movement has seen a concerted effort to court technology companies.

David Cameron by World Economic ForumThis is for a few reasons. It’s partly an attempt to find some light in the economic gloom. It’s partly an attempt by Prime Minister David Cameron to appear connected, forward-thinking and switched on (look at his relationship with Google to understand the positioning here). And it’s partly an attempt to turn the legacy of the Olympics into something more by enticing big tech firms to the area — even if they don’t contribute much in the way of tax revenue to the British economy.

But Cameron’s commitment to bolstering the startup economy is actually even deeper than that.

Right now, I think the British government — or at least it’s gov.uk team, which is rebuilding government services to be “digital by default” — is actually the most exciting startup in the country.

It’s dealing with big problems in a smart way, tackling and operating in a lean, mean, aggressive manner: a world-leading approach that Tim O’Reilly recently said set the standard for governments. And to do that, it’s hired some of the most impressive coding, design and strategic talent around. Over the last couple of years a sequence of great talent — mainly from London, many of them friends of mine — have been sucked into the gov.uk machine as they try to reinvent the way Britons connect to their public services.

Don’t get me wrong: tackling big problems is great, and the work that Government Digital Service is doing is extremely important. But I think it’s an indictment of the local scene that so many great people are choosing to work for the civil service, and that the apparently thriving scene around Old Street seems to be more and more reliant on government boosters.

So how do you fix that?

The challenge to Britain’s startup community

A few months ago, I wrote that London’s tech community was looking at “golden moment”: a confluence of circumstances that could see the region really push on and make good on its promise.

Now, however, I’m less optimistic. There are lots of great companies and strong ideas floating around the UK startup scene, but right now there are too many poseurs and very few world beaters. The latent potential is not being achieved, and the signal is being crowded out by all the noise of bearded startup hipsters tapping away aimlessly in local coffee shops.

Wine GlassStill, I believe this is a glass-half-full situation. Those who are really taking the bit between their teeth and developing serious businesses are doing very well. Moshi Monsters has turned into a massive children’s brand; online loans company Wonga is doing things that banks can’t; innovative smaller outfits like BERG and Makie and others are making waves in their industries.

But the scene needs an injection of real talent and ambition — in part from the same people who have been subsumed into the government’s digital efforts. While they get down to Important Public Service stuff, the hangers-on have fallen into a self-congratulatory funk, drunk on applause from boosters and ego massages from investors looking to pump up their own interests.

Fortunately, most some of the talented individuals working on gov.uk are contractors, not staff. When their time is up, they’ll be back out. Let’s hope they do something great when they’re free again.

In the meantime, listen up, Silicon Roundabout: don’t buy into the mirage of success. It’s time to stop combing your mustaches and build something important.

Update: Mike Bracken, who heads the GDS project, has been in touch to say “most of our people are civil servants, as we’ve removed loads of contractors as per government policy”.

Glass of wine photo courtesy of Flickr user Davide Restivo

  1. Bobbie, it would help if you define what you mean by “build something important.”

    If you believe the findings from the Centre for London’s report entitled “A Tale of Tech City”, then the primary gating factor to further progress is perception of a significant skills gap — particularly in the area of hardware engineers and software developers.

    But the belief that there’s a talent shortage is likely related to comparing the London tech scene to the Silicon Valley in California. That comparison, in my opinion, is misguided — because it doesn’t acknowledge London’s real talent strengths (digital content).

    My point: it is what it is — I don’t see any value gained from criticizing the caliber of the talent pool within the East London tech cluster. If the best example of current success are the folks at Mind Candy, then just celebrate that accomplishment.

    Moreover, aspirational goals for the cluster need to be better aligned with the local market reality. Then, maybe the glass becomes half-full, and the upside potential is much more encouraging.

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  2. Paul Hillyard Sunday, December 9, 2012

    The gov.uk website is one of the worst websites it has ever been my misfortune to use.
    Poor navigation and inappropriate headings, bankruptcy on the same page as business start ups. That will encourage new entrepreneurs won’t it!
    If these people are the best, god help us.

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    1. Clearly you didn’t try to buy olympic tickets online this year.
      Nothing compares to how bad that user experience was.

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  3. True true. Not much core software and chip technology, mostly light tech, apps and media. Most of it is not of much value but the media/content side will be big in employment and incomes, if not in valuations and franchise platforms. Govt should be focusing on the Oxbridge/Durham/Bristol tech network, including ARM, Sage and Autonomy alumni. The UK has not only neglected but shat on engineers for wayyyy too long. Will take a decade or two of hard work and austerity to change that cultural fault. ‘Bout time someone blew the Old Street cover, but still good to see that efforts are being made to make change.

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