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Can the UK Create Something To Rival Silicon Valley?
An anonymous reader writes "Hoping to bring together ambition, creativity and energy in one place, the UK government hopes to grow East London so that we can benefit from the same sort of success that has been seen in California; jobs, tax revenue, highly skilled workers and takeovers. If it works, the country would massively benefit, with something to rival other established industries."
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A good start would be not offering to arrest and deport people who broke no law in your country.
The UK doesn't have any PC manufactures.. ..Because they have not yet found a way to make PCs leak oil.
Look at what happened with the Raspberry Pi, import taxes pretty much sunk any possibility of building it in the UK.
I am one of those people who came to the UK to jump form a successful startup (Playfish) to another successful startup (Plumbee), but my main problem is finding a place to stay that works out. I want a place that is: - Close to the office - Got decent standards - Is affordable - I can have for a long term In London I can only choose two from that list. Then there are extremely greedy landlords and sleazy estate agents that will only want to fool you of your money in a not so well regulated business. This is practically making it impossible for me to be able to save up money and continue to do my job here, and is the main reason for me wanting to move away from London as soon as possible and leave this wreck of a housing market behind.
What we actually need is a new "wild west". A place where there are no artificial restrictions like patents, lawyers and what not so that innovation can flourish.
If Pandora's box is destined to be opened, *I* want to be the one to open it.
the UK government hopes to grow East London so that we can benefit from the same sort of success that has been seen in California;
- DOA, just like Russian version of Silicon Valley (Skolkovo).
That is unless the government in UK is planning to get rid of regulations, taxes, labour laws and inflation of-course.
MY OTHER COMMENTS
Why not try to do it in Cambridge? It's already a major technology cluster, better invest there than to try to recreate something from scratch...
Sorry, yes, the UK already has
http://en.wikipedia.org/wiki/Silicon_Glen
Watch those corners
No
What is the author smoking. California currently has $380 billion in devt and a 10.8% unemployment rate. I would call that far from being successful.
If I were the UK, I would not want to model anything after California
sudo make me a sandwich
The vast majority of SV ventures have been expensive failures. It's essentially a welfare economy subsidized by venture capitalists who prey on the ignorance of non-technical investors. The rare ventures that succeed tend to move out of SV. The vast majority of SV workers never get rich; they move elsewhere when they are past age 30 and are no longer welcome. SV puts out its hype about the virtues of "hard work", "two men in a garage", and "no government" -- though in reality, it's about knowing the right people, being in the right place at the right time, and making most of their money from government contracts. Most scientific advances happen outside of SV, and most successful high-tech businesses are based outside of SV. I would say that SV is just a mysique created by the banking industry.
The future of high-tech leans toward medicine. SV is not strong in medicine; they just have bubbly biotech start-ups that typically disappear within a year. The successful high-tech business of the future will depend more on interactions with non-IT people, but SV's homogeneous population places it at a disadvantage there. SV does not have large numbers of health care professionals, industrial technicians, or other types who would provide valuable input.
Also, no non-compete contracts.
If there are enforced non-compete contracts then there will be no community of individuals to hire to create a "Silicon Valley".
Don't know something? Look it up. Still don't know? Then ask.
Different places have different specialties.. And when a place attracts lots of people who know something, it becomes a pole for that thing, generates high salaries in that field, and make life very expensive for everyone else. Silicon Valley, Bangalore, etc do high tech. New York, London, Hong Kong do banking. You can't have all of them. And I doubt a small-ish country like the UK can have many of them. The US can afford to have New York and Silicon Valley because they're very very far appart. The City is just too close to East London (or even Cambridge) to make them separate markets, meaning that old humid houses are still terribly expensive and no one in their right minds would want to move there unless they are made tons and tons of money.
It's a pointless question. Let me explain:
Theoretically, the UK could try to accomplish this. The main barrier preventing any type of industry from flourishing in the UK is the obscenely high effective tax rate on human activity. (please give this typical figures, maybe in percentage if you're more familiar Brits)
The UK could then make an attempt to relieve a certain location and industry of these high taxation burdens to have the locus flourish.
The problem is that while this is a good move and should be applauded, simply cutting taxation on human activity without cutting the corresponding government spending doesn't solve much. The spending has to be paid for somehow, whether that is immediately by confiscating funds from other people and locations or somewhat delayed by building deficits and inflating the fiat money supply and thereby causing the mis-allocation of resources and bigger busts and recessions or depressions, people will continue to pay the piper.
The only sure way to encourage industry to flourish is to cut regulation and cut government taxation and spending. Remember, most government taxation is appropriating funds from a more effective use determined by the market, and instead putting them to less effective use as determined by bureaucrats.
Liberty.
No, because UK doesn't have Al Gore.
You don't need civics class for that now. You can learn all about it with Johnny Depp in their wonderfully instructive series Pirates of the Caribbean.
The boat sailed on a Silicon Valley workalike about 25 years ago. What with all the tech patents, software patents, business model patents, and patent trolls sewing up innovation unless you're already IBM, Microsoft, or Apple, you won't be able to innovate and defend anything What are they thinking, incubate and develop the next Facebook? The next PayPal? TechLawyers.com?
Understanding the scope of the problem is the first step on the path to true panic.
A lot of things have to come together to create a 'Silicon Valley'. 1. You need a university center of excellence (like Stanford University) that actively promotes the high technology business. They have (or at least had) leases on land in the Santa Clara Valley, and offered good rates to fledgeling technology companies. 2. You have to have an entrepreneurial spirit: this isn't some 'I just graduated from business school, now I want my million dollars' boob, you need someone who has an idea or a set of ideas, are willing to put in time and effort developing those ideas, and create things that people want. Some of that spirit comes from being highly creative, almost artsy, and that's a trillion light years from any business school 'follow the leader' types. 3. You need financial backing from people who can see things in the long term. All countries have banks, but most have banks that turn tail and run at the first sign of trouble. They don't want to backstop people for the long term. They are good at providing money when the company doesn't need very much (when the sun is shining they offer umbrellas), but then it turns cloudy or starts to rain, they want their money (umbrella) back. Many other countries have centres of excellence with an entrepreneurial spirit, but a crappy banking/financial system where there is no long term outlook. Companies in these countries fail, because the financial backing is lacking.
You need to find someone to pick the right start-ups. Those people are rare, and unlikely to work for a city.
You need a pro-privacy, pro-free speach atmosphere, something that UK seriously lacks. (Cameras, libel laws, etc)
You need a good source of well educated people interested in science, not business.
You need a good place to live. Something that will attract smart people to live there besides the money. The UK is not sunny California.
excitingthingstodo.blogspot.com
so that we can benefit from the same sort of success that has been seen in California
Yes, and for free, if you order now, you will also receive:
*Crushingly high real estate prices
*Monstrously overcrowded prisons
*Bankrupt schools
BUT WAIT! THERES MORE! Be one of the first 100 callers and receive, as our special gift to you:
*Shortages of electricity and water!
*Political leadership totally devoid of morality, consistency, or backbone!
But seriously, California is a "hotbed" for ONE single reason: The weather is nice pretty much all year long. Anyone who lives there and tries to sell you on something else is lying to themselves. People go for the nice weather, and they put up with the constant bullshit because hey, it like never snows, unless you live in the mountains, which are only like 2 hours' drive away from the beaches... So why not live there? Right? And once you get enough smart people in one place (they are bound to turn up when you have 30 million people to start with) things just sort of take shape.
So, UK, you want your own Silicon Valley? Get a warm-weather generator, a couple of nice schools, a semi-pristine coastline, then fill it over the top with people, and wait 50 years. You will probably get something like that, or hey maybe you will end up with something like Haiti. Could go either way.
I think that Silicon Valley and innovation these days mostly means software development and services on the Internet, and not so much hardware devices and operating system.
I also wonder why technologically minded people would want to move to a place and innovate when you get arrested for a tweet. Now before +Troll, think about it for a second. Most people responsible for innovation these days don't like regulations constraining the Internet, and certainly not regulations and laws that get users thrown in jail.
The UK truly is a pit of shit right now as far the Internet, freedom, privacy, freedom of speech, etc. is concerned. Not exactly attractive to most of the talent in the rest of the world. If you are already there you are just making the best of it.
California is broke because of Prop 13. It basically cut out from under it the main funding mechanism for the state government property taxes and then put severe limitations on how the state could raise funds through other mechanisms by making any tax increase in other categories like sales tax or income tax too difficult to enact. As such the previous high-tax/high-service government that Californians enjoyed became unstainable.
Additionally, due to the initiative system the state has almost no control over it's finances. Something like 70% of the budget is mandated spending by initiatives, with a large portion of the remaining 30% either things you have to spend money on like police, or required via Federal funds. It's why to pass a budget every year they always need to resort to some tricks. And with the requirement that they need 2/3rds majority to pass any budget, instead of 50%+1 like every other state in the union, means the minority party has no interest to negotiate.
Until then the question is moot.
No, because UK doesn't have Al Gore.
No but they have Tony Blair, and he's teflon coated, Al Gore only has hairspray and makeup.
I thought California is broke because people can vote for propositions while simultaneously voting against any measures to fund said propositions. The general fund isn't an unlimited source of free money.
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If you want a "silicon valley" in the UK, don't target East London. Extend what you have and go for Reading [pronounce "REDDING"], which as it happens is already nicknamed "The silicon valley of the UK". Comfortably, Reading is already the home of many small unknown companies such as Oracle, Nvidia, Microsoft and Symantec.
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It's a recurrent theme in British politics. Look up Harold Wilson's 1963 "White Heat of Technology" speech and the creation of the Ministry of Technology.
Britain within living memory has been a technology leader in aviation, nuclear, computing, Those were largely developments that came out of the war and declined in the face of a dependence on government money for investment (and in the latter case, an unwillingness to admit even to the existence of the technology).
Private investors aren't interested in long-term investments - the "investment banking" industry has become big largely because it's eschewed actual growth-producing investment for complex financial instruments which are essentially a form of privatised taxation.
There is still a lot of high-tech industry (take Rolls Royce aero engines for example), but it survives and grows pretty much in spite of the business environment. It's no accident that Britain's now successful, productive and growing car industry is owned and financed from Japan, Germany and India.
It may be possible to grow IT-based industries in London, but they won't be owned in London and nor will any IP associated with them. And I'm afraid the government is sufficiently clueless about technology that it might actually feel it needs to encourage businesses like those cited by the article ( Instagram, Skype and Groupon) whereas there is probably a lot to be said for actively discouraging them.
Plus, this seems to be all about exempting businesses from paying their normal dues. I'm all in favour of foreigners spending money in London. I'm not in favour of the government giving it back with interest to encourage them.
I'm an employer in the UK but lived in US for 5 years. UK's pretty good for employers really. You have to provide more time off (minimum of 5.5 weeks off per year) but that's offset by not having to provide health insurance. You have to be a bit more careful about firing people (if they've been with you more than a year) than fire-at-will states, but you're less likely to be sued for some random bullshit because people just don't pull that crap as much here. Compared to the rest of Europe -Italy:paperwork and regulations are horrendous, france:everyone is on holiday all the time, hungary: tax doubles your costs, etc.. the UK is very employer friendly.
http://rareformnewmedia.com/
I thought it was the http://en.wikipedia.org/wiki/M4_corridor
Your summary of the article is stupid. None of those sentences are quotes. In fact the article states at the end that SVs great weakness is that it's a crap place to live, directly contradicting what you wrote. Here's an actual quote:
Yes, yes it is. Having lived temporarily in the Valley and grown up in the UK, I'm pretty sure I don't want to live along the US-101. I'd do it if there was some really compelling reason, but otherwise no thanks - love the sun, hate the driving. Rents and property prices in London are absurd and most likely still a bubble, but other than that it's not a bad place to live at all.
Your other points (not quotes) are also pretty stupid. There are a ton of well educated people in London, as well as many Brits working for Silicon Valley based companies. The UK has a long history of computer science, you know about Bletchley Park, right? The BBC Micro? The government doesn't deserve any credit for it (the BBC does!) but there were a ton of people growing up in the 80s and 90s who had access to really good computers and lots of educational material about them. It certainly got me started. At 28 I'm now a senior engineer at Google (in Switzerland).
BTW I think it's really great that companies like Amazon, Facebook and the big G have set up shop in London. These companies are great at training people who can then develop the confidence and skills to go do their own companies (Facebook was practically made of ex-Googlers back in the day, don't know if it still is). Especially anything internet related that might scale up fast will benefit a lot from the pool of skilled workers these companies will attract and create.
That's incredibly narrow speech. You make it sound like we have no freedom of speech because we can't threaten the President. That narrow restriction does not only apply to him/her either, but also applies to my neighbor as well.
So aside from some very narrow restrictions on speech, there is a much greater freedom of speech in the US, and you certainly cannot view the UK and the US as equals in that regard.
My previous employer had a non compete clause, but then they were an American company (though they waived it when they moved our dev jobs out of the UK and made us redundant). My current employer (which is British) doesn't, and I don't remember any British company that I worked for having one.
At some point, somewhere, the entire internet will be found to be illegal.
The world is full of urban centres that are trying to emulate the success of Silicon Valley. Ever heard of Silicon Valley North? No, I don't mean San Francisco. It's a term my home town, Ottawa, Canada, has adopted for itself. It's also been applied to Toronto, Vancouver, Waterloo, Calgary, and Montreal. But the truth is that none of them have a decent claim on the title -- they can't touch the real Silicon Valley in terms of scale, depth of expertise or level of innovation.
There's a big barrier to anyone trying to be the new Silicon Valley and it has nothing to do with corporate tax rates or research incentives. Those are all easy to measure and copy. It's the network effect -- the same one that makes eBay, the QWERTY keyboard and Microsoft Office so hard to displace. The smart people want to go to Silicon Valley because that's where the smart people are. After all, being with other smart people is not only more interesting, but more likely to lead to your own success. It's easy to see in a place like Ottawa, where the cream of the tech community are frequent targets for Silicon Valley head-hunters. They go, not (just) for the money, but to be part of that scene.
So good luck East London, but maybe you should have a plan B, just in case.
Non-competes aren't necessarily unusual. They are however difficult to enforce.
The courts use awkward terms like "Restraint of Trade" to back individuals' rights to go and get a job.
The largest problem California cities face is from the excessive costs of public employees, former public employees, and the related pension plans.
That growing segment sometimes acts like a cancer looking to feed itself. Even the the regional impact of large box stores is negative (low wages, usually no health coverage for employees, most goods sold are imported, most profits leave the area), it is common for city managers to seek out such large stores to snatch sales tax revenues away from nearby communities.
California also has the mixed blessing of many (largely illegal) immigrants. Those that have stayed long term (not seasonal workers) are a significant load on education and healhcare services. There are some other hidden costs, like insurance against uninsured drivers.
There are relatively few manufacturers of basic components, with most now from Asia. One has to look pretty hard to find much large scale hardware manufacturing in Silicon Valley. Silicon is used in chips (hardware). Many seek their fortunes in software. For actual manufacturing with the surrounding support industries present, Germany is probably a better model to look at than Silicon Valley.
Of course one could skip the making things part, and just have a community based on takeovers and outsourcing. It's about lunch time here. Care for a virtual hamburger?
Even with proposition 13, city revenues skyrocketed as properties sold at higher and higher prices, making that 1% tax quite substantial. Foolish city managers funded excess growth and large salary increases. They tend to suck up as much revenue as possible. When you've got parasites on a bubble, problems should be expected.
There's no reason to have Highway Patrol at time and a half overtime rates sitting parked by construction crews on the highways. Others could do that job at a tenth of the cost.
Property and gasoline taxes were meant to fund essential productive services like education and highways. Cities shouldn't get either of those. They already get cuts of sales taxes, impose hotel taxes, parking fees, utility taxes, construction permits, and cook up a whole bunch of things they can fine people for. Most of the inflated salaries are going to unproductive functions. Some services would be better handled by volunteers, or contracted out as a sort of temporary limited term working welfare for the unemployed. Even many with disabilities can be given simple maintenance jobs.
A central California community recently was fining homeless for sleeping in their cars. They came up with a plan to allow about 5 to have a place to park at night. The cost for six months? $60,000.
Those people could have a place to live for what the city would spend for (city "public safety" employee supervised) parking spaces.
If the U.K. can create a district focused on manufacturing, supporting, and installing energy producing/saving gear, that might work. It still might need subsidies, or be protected with tariffs on imports, to remain viable. Certain the idea is to improve and maintain the quality of life while having a healthy economy and environment. The cost of living should be kept low. Parasitic funding through things like tax on homes should be kept to a minimum. People and communities should be viable in a largely self-sufficient form. That means avoiding large outflows of revenue for manufacturing or energy, and operations that derive revenue from a community must spend/invest most of that in the same communities. Funding society on debt, and then having most of that wealth sucked off to make a very few extremely rich is not viable in the long term.
It leaves communities sick, and too many unemployed or virtual slaves at a time when technology should have made life better for everyone. If the percentage of government workers owning homes is higher than that of the general population, you've got a parasite infestation.
Some tax incentives for R&D may be healthy, but there must be strong controls to avoid economic leakage (the parasitic/exploitive effects).
That's "Siliconionium" to you, pal
You ignorant shit. Teeth are not naturally white. Just because you damage your teeth by painting them (or scratching the protective cover off them) every day doesn't make our dentists shit.
It means we spend less on cosmetic surgery than you.
Hey, that's fine. I have no issue with you spending your disposal income on worthless vanity. But please, don't go pretending it makes you any better than people with a more mature outlook on life.
People are not an unlimited source of free money either which is why they forced that proposition thing through.
Of course, huge corporate tax breaks are not much good if you tax the population so much that the high cost of living means the companies have to pay higher wages, causing them to leave in droves for Texas and elsewhere (I can look out my window and see the "Nissan of America" building, previously headquartered in California).
The M4 corridor/Thames Valley took off because of its proximity to Heathrow, and as such is very good for UK bases of large multinationals, but doesn't have the start-up culture that makes SF. That's what the work in Shoreditch is about. I've taken a few trips down there for various events and they've certainly got all the ingredients to make something great, but I presume all the other (failed) attempts at replicating Silicon Valley have too. Personally I hope they pull it off, but I remain cautiously optimistic.
Meaning of Life.
Sure they can, with a giant military to destroy anyone who resists. That's how empires work.
Of course, this isn't likely to happen any time soon, since there's too many competing factions at the moment which are too powerful for any one faction to take over everything. But factionalism doesn't have to be a problem with regional governments; just look at China: you think they have any problems with factions trying to break away? Of course not, they just send in the PLA and crush them.
But yes, in a hypothetical future where we don't have empires trying to take over everything and crush dissenters, and things are mostly based on democracy and voluntary cooperation, I don't see how a planetary government is remotely possible. The Europeans can't even manage to cooperate with each other enough to maintain a loose union with a shared currency, and they have far fewer differences amongst themselves than they do with far away countries like China or countries in the middle east or Africa.
No, it's not common and the courts take a dim view. If any term in a no-compete is considered overly strict the court will just null they entire thing (they cannot reduce it to a reasonable level).
Anyway they've shot themselves in the foot by trying to make everything short term contracts. Nobody signs up for 6 months with the prospect of limiting what they can do in the following 6 months. I resent contracts anyway, way to build a committed employee-employer relationship there guys :/
Even if someone did have a no-compete, unless they were a senior manager or something I can't imagine a company bothering to try and enforce it.
If any term in a no-compete is considered overly strict the court will just null they entire thing (they cannot reduce it to a reasonable level).
Posting AC for obvious reasons...
My current (US based) employer had me sign a non-compete when I was hired. I was a bit turned off, but it's been almost a year and I can honestly see why they did so now that I have heard all stories from previous developers who jumped ship, stole clients (some I am sure you've heard of), and moved across the street.
The one I signed stated something along the lines of a 50 mile radius being the area included, I don't recall. I thought that was a bit silly, considering that would require me to move if I wanted to change jobs.
A few months ago, there was a frivolous lawsuit brought against us by a former client that was backed by the developers that left and moved across the street. We won the case, but soon afterwards the official employment contract was amended to reduce the non-compete down to a 5 mile radius.
I am guessing the reason why was because the previous contract signed by the developers who left was not enforceable in court.
Fortunately, and especially is this niche of industry, developers are often quite incompetent at what they do, and we are routinely awarded new clients based on the fact that their previous developers built nothing but a shit product. Of course this means I inherit a lot of garbage, but it certainly keeps me busy enough.
Kinda happening. Boston would be the other location.
In the UK they actually are providing "tax credits" - temporary low tax rates for businesses setting up and hiring in high unemployement areas.
Thing is, the "Silicon Roundabout" - what a pathetic name - is in one of those zones, "subject to contract" - they're looking to create the tech equivalent of the city/canary wharf for finance, mayfair for hedgefunds and soho/fitzrovia for fashion.
I am very sucseptible to "let's have another drink"
What is the infrastructure in London like? Is there easy and direct access to roads, or is there draconian limits on driving in the city. Is there universal access to high-speed internet, or are there restrictions on what you can do with your net connection?
The roads aren't the primary transport infrastructure in London (that's railways), the limits actually help companies (by reducing congestion). But as a way to start your comment, you seem like you've made up your mind already.
I'll answer your questions very quickly: Internet yes, restrictions no, business *extremely* easy, tax breaks no, political favours not really, tolerance for ideas yes, radical political ideas yes, libel is complicated (and how is this going to affect you anyway?), the IP stuff is global, I've never felt monitored, afraid, or been looking over my shoulder in London.
Bored now, since you're just on an anti-UK ramble anyway.