The name for the tech cluster at Old Street was coined as a wisecrack and adopted as national policy, and nearly two decades on it is worth asking what the joke turned into
How Old Street Became Tech City
I moved to Shoreditch when the roundabout was just a roundabout. A grim, four-lane gyratory with a sunken shopping arcade in the middle that sold phone cards and sausage rolls. If you had told anyone waiting for the 243 that it would shortly be compared to California, they would have moved away from you.
The story of how that happened is one of the stranger episodes in the neighbourhood’s history, and it began with someone being funny on the internet.
The Joke
In about 2008 a handful of small technology companies had settled in the streets around Old Street. A developer at one of them posted a remark online. With so many web firms near the junction, he suggested, the place ought to be called Silicon Roundabout.
The online encyclopaedia’s entry on the district records that the name was initially proposed as a tongue-in-cheek joke. That was the whole point. Silicon Valley is sunshine, campuses and billions. This was a traffic island in the rain.
The name stuck, as jokes do. Journalists liked it. Within a couple of years it was being used without irony.
Why They Came
The firms had not arrived because of any plan. They came for the oldest reason in London: it was cheap.
A trade magazine surveyed the area in 2010 and listed thirty of its media and technology businesses. Its introduction was frank. The streets around Old Street and Shoreditch, it said, had for some years been a natural technology haunt, largely because of cheap rents.
One agency boss quoted in the piece compared Shoreditch to what Soho had been twenty years earlier, and said that a cool office there was a selling point in hiring young staff.
That is how these clusters form. Not by design. A few people who cannot afford anywhere better take space in a run-down district near the centre. They like being near each other. Others follow. There are pubs. Ideas and employees move between firms. By the time anyone official notices, it has already happened.
The warehouses and workshops that had housed the furniture and printing trades for a century were empty and enormous. The landlords were glad of anyone.
Then the Government Arrived
In November 2010 the Prime Minister of the day made a speech. He used the joke name. He announced that the government would back the area, rebranded as Tech City, and link it with the Olympic Park at Stratford to create a British rival to Silicon Valley.
The same magazine piece noted the ambition: to connect the booming media and technology industries of Old Street with the Olympic site.
A body was set up to promote it. Large American companies were courted. In 2011 one of the biggest acquired a seven-storey building near the roundabout and opened a campus for start-ups. Others followed.
By 2012, according to a figure cited in the encyclopaedia entry, a technology magazine was estimating some five thousand tech companies in the wider area.
A joke on the internet had become a line in a Prime Minister’s speech and then an entry in the national industrial strategy. All in about three years.
The Money Follows
You could watch the next stage happen. A technology news site reported in the spring of 2011 that venture capital investors, who had always kept their offices in Mayfair, were beginning to take desks in the area. One leading firm, it said, was to take some desks in Scrutton Street, alongside a number of start-ups.
The reasoning given was that to stay close to what was happening in technology, it made sense for investors to be where the companies were.
Scrutton Street, I note, is the same street where a 19-storey office scheme is now proposed. That tells you most of what happened in between.
What the Attention Did
Here is the irony that everyone who was here then will recognise.
The firms came because it was cheap. The publicity made it famous. Fame made it expensive. And expense drove out the kind of firm that had come in the first place.
Rents on the streets around the roundabout rose steeply through the 2010s. The start-up of six people in a draughty warehouse could no longer afford the warehouse. It had become a managed workspace with a roof terrace, let by the desk at a price that assumed investors’ money.
Some of the early companies grew and stayed. Many moved on: further east, south of the river, out of London. The big names took the big floors.
What had been a cluster of small, scrappy outfits became an office district for established technology firms. Those are both valuable. They are not the same thing.
Was the Government Wrong?
Opinion divides, and I shall give both.
The case for: the attention brought investment, big employers and a reputation. London became the leading technology centre in Europe, and Old Street was the address that symbolised it. Thousands of well-paid jobs exist that would not otherwise. A place that had been declining for fifty years was given a purpose.
The case against: none of that required the government. The cluster was forming on its own. What official enthusiasm added was hype, and hype is what pushed the rents up. A sensible policy would have protected the cheap space that made the thing work. Instead the state put a spotlight on it and let the property market do the rest.
There is a third view, which I have come round to. It was going to happen anyway. Shoreditch is a ten-minute walk from the Bank of England. Cheap space that close to the City was never going to last. The tech firms were the bridge between the empty warehouses and the glass towers. If it had not been them, it would have been someone else.
What Is Left
Walk round the roundabout now. The gyratory has been rebuilt. There are large screens. The buildings are taller.
The technology companies are still here, and the council’s latest plan assumes more are coming. It speaks of eleven thousand jobs.
What you will not easily find is the thing the original joke described: a few dozen people in borrowed rooms, building something on no money, within shouting distance of each other. That has moved. It always does.
The man who made the joke was right about the name. I wonder whether he knew what it would cost.
The London Prat was there before the beanbags and remembers. It covers the district in its British satirical news on Silicon Roundabout and its London satirical news about start-ups with beanbags. Bohiney Magazine covers the original valley, where the rent is worse.
SOURCE: https://bohiney.com/
