The “Tech City” Delusion – A cluster of digital businesses in East London

The “Tech City” Delusion – A cluster of digital businesses in East London

Original post by LABKULTUR

A cluster of digital businesses in East London, the “Tech City” concept was launched by the Prime Minister, has been lauded in the media and studied by economists. Now it’s viewed as “Britain’s answer to Silicon Valley”. It sounds too good to be true. Are we suffering from the Tech City Delusion?

The cluster’s name, Tech City, was “launched” by the Prime Minister David Cameron in 2010.
He demanded that the London government (the GLA) put in place a strategy to develop the sector. And others joined in with UKTI, who promote UK companies abroad, setting up the Tech City Investment Organisation to promote the area.

And it has been studied closely by academics and policymakers. The Centre for London, a think tank, launched a big report on the area – A Tale of Tech City: the Future of Inner East London’s Digital Economy.

As this says itself, “The economic significance of East London’s digital economy means it is critical to get public policy right”. Tech City is a big deal for the UK’s economic growth as the government is looking to it as a model for economic growth.

So what can we learn from the cluster? There are persuasive arguments to say that we can’t learn much. Here is why we might be suffering from the Tech City Delusion.

“There’s bound to be a cluster somewhere” (Sampling error)

Consider the 110,000+ jobs in the digital creative sector in London. If each one was a dart and you paid a monkey to throw them, at random, at a map of London, the nature of probability suggests that you would expect some to cluster in one part of the map. Especially if you consider that commercial property is already clustered in a much smaller part of central London.


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