Vir­tual clus­ters can be the new Sil­i­con Round­abouts

With less em­pha­sis on where we work and more on ex­per­tise, in­no­va­tion will still be able to thrive

The Daily Telegraph - Business - - Technology Intelligen­ce - Ger­ard grech com­ment

In 2010, “Sil­i­con Round­about” was the la­bel for a small clus­ter of start-ups housed in the cor­ners of Lon­don’s Old Street. Po­lit­i­cal im­pe­tus, favourable head­winds and global tal­ent turned this light-hearted moniker into a proven, na­tional suc­cess story.

Fast for­ward a decade, and there are now over 35,000 start-up and scale-up tech busi­nesses across the UK.

The idea of phys­i­cally clus­ter­ing with other like-minded busi­nesses was strong. Like that round­about, the pan­demic is forc­ing us to come full cir­cle on our think­ing.

It is easy to for­get the in­ven­tive­ness needed to sup­port tech in the UK. While the fi­nan­cial cri­sis of 2008-9 helped catal­yse the fin­tech in­dus­try, other strata of the tech sec­tor lacked the in­vest­ment and vi­sion that were needed to ex­cel.

The Gov­ern­ment’s suc­cess with shin­ing a light on the then Sil­i­con Round­about shouldn’t be viewed as a sin­gle sub­urb suc­cess story; it’s the wider nar­ra­tive it helped carve that gave UK tech a global show­case.

Cen­tral to this was the well­doc­u­mented and em­pir­i­cally sup­ported con­cept of clus­ter­ing and its rip­ple ef­fects.

The Gov­ern­ment fos­tered tech with sup­port­ive poli­cies around visas, pro­cure­ment and tax.

Equally im­por­tant was the mes­sag­ing. Del­e­ga­tions of tech busi­nesses joined politi­cians on in­ter­na­tional trade mis­sions.

Time and again, the wel­com­ing en­vi­ron­ment for tech was drummed home in key­note speeches. Sil­i­con

Round­about has pro­duced suc­cess sto­ries, such as the uni­corns Far­Fetch and Trans­fer­Wise, but its im­pact was wider than in­di­vid­ual com­pa­nies. The round­about grew into a city, then into a na­tion, as re­gional clus­ters emerged across the UK.

By 2019, a quar­ter of the top 20 Euro­pean cities for tech­nol­ogy in­vest­ment were in the UK, with Manch­ester the fastest grow­ing Euro­pean tech city be­tween 2018 and 2019. Soft­ware de­vel­op­ers were in the top five most sought af­ter roles across UK cities last year, among key worker roles such as nurses and so­cial care work­ers. With a highly paid, work­from-any­where work­force, I pre­dict the UK tech sec­tor will re­main a re­silient em­ployer in the chal­leng­ing months ahead.

What is harder to pre­dict is the depth of the changes that Covid-19 will have on the busi­ness com­mu­nity. Some are self-ev­i­den­tial.

More firms have em­braced re­mote work­ing. Peo­ple are re­duc­ing time on trains, and con­nect­ing dig­i­tally. Work­ing from home means that busi­nesses can dump their phys­i­cal of­fices and the high rents and rates of a cen­tral city lo­ca­tion.

As the CBI and oth­ers point out, the par­tial “hol­low­ing out” of city cen­tres has se­ri­ous ram­i­fi­ca­tions for the plethora of small busi­nesses re­liant on that pass­ing trade.

One can see that re­flected in job losses in ser­vice sec­tor busi­nesses that will be hit worse.

But there is a deeper im­pact on es­tab­lished busi­ness prac­tices. Many busi­nesses, es­pe­cially young am­bi­tious scale-ups, might see a re­duc­tion in the serendip­i­tous benefits of phys­i­cal clus­ter­ing.

Some busi­ness founders I have been speak­ing to are in­creas­ingly look­ing at the benefits of a pop-up of­fice which al­lows reg­u­lar face-to-face meet­ings with­out the need of in­vest­ing in a per­ma­nent space. Not be­ing tied to a phys­i­cal of­fice also en­cour­ages the hir­ing of re­mote work­ers from any­where.

A CEO in Bris­tol pas­sion­ate about sup­port­ing the South West may no longer hire based on lo­ca­tion.

We, as a coun­try, have to think about how and whether we make it eas­ier for com­pa­nies to re­cruit from out­side the UK with­out need­ing to phys­i­cally bring em­ploy­ees into the coun­try.

In a pre­vi­ous role, I man­aged teams around the world. When it works well, we have round-the-clock of­fices with all its pro­duc­tiv­ity benefits. But the vir­tual doesn’t negate the phys­i­cal, of course. We are hu­man be­ings, not dis­em­bod­ied brains and would like to live some­where and con­gre­gate with like-minded peo­ple.

Cities, towns, uni­ver­si­ties and col­leges will con­tinue to or­gan­i­cally grow on their ex­per­tise. Vir­tual clus­ters will en­hance ca­pa­bil­ity to send ex­per­tise across the globe.

I make this point be­cause Covid-19 is more than just a na­tional dis­rupter to the fu­ture of work; it is chal­leng­ing the em­pha­sis we put on “place”. This by its na­ture ques­tions the im­pact of phys­i­cal “tech clus­ters” in the UK.

In this new decade, we need to find the best way of dig­i­tal clus­ter­ing,

‘The round­about grew into a city, then into a na­tion as re­gional clus­ters emerged across the UK’

‘We should sup­port no­mad visas for in­ter­na­tional tal­ent who pre­fer to work where they choose’

en­sur­ing pro­fes­sional net­works and cu­rated data­bases of in­for­ma­tion can repli­cate the in­no­va­tion and knowl­edge-shar­ing that hap­pen in phys­i­cal en­vi­ron­ments.

Vir­tual clus­ter­ing in an in­ter­na­tional fo­rum could re­place tenets we’ve long held dear. Of course, this has an im­pact on cities and their pol­icy mak­ers, es­pe­cially global pow­er­houses like Lon­don.

The com­bined ef­fect of tal­ent clus­tered in a phys­i­cal city with vi­brant ed­u­ca­tion and cul­ture sec­tors has al­ways been po­tent.

How­ever, in the next decade, we should move be­yond plac­ing em­pha­sis on phys­i­cal clus­ters as the knowl­edge and eq­uity moves to the cloud.

We should sup­port “no­mad” visas for in­ter­na­tional tal­ent who pre­fer to work where they choose and reach a cross- bor­der agree­ment on how such em­ploy­ees will be treated for tax pur­poses.

If we want to pre­pare the coun­try for the next decade, these are the new vi­sions we have to come up with. Does place-based pol­icy mak­ing still make sense when op­por­tu­ni­ties are bor­der­less?

Ger­ard Grech is chief ex­ec­u­tive of Tech Na­tion, the growth plat­form for tech com­pa­nies and lead­ers. You can fol­low him on Twit­ter @ger­ard­grech

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