On an unusually warm November afternoon in 2011, the newly-elected British Prime Minister David Cameron stepped out of a limousine and strode into a former brewery in Shoreditch, London. The brewery was now a coworking space called, creatively, Tech Hub, and Cameron was there to announce his new vision for London’s dilapidated East. He called it “East London Tech City,” but everyone else knew it by another name: Silicon Roundabout.
The moniker originated with Matt Biddulph, the Chief Technology Officer of a social media startup called Dopplr, back in 2008. Biddulph was peering out of his window at a Shoreditch intersection, the ugly one between Old Street and City Road, when he fired off a tweet:
It was meant in jest. But within three years, it had become UK government policy.
After the Global Financial Crisis, Cameron was desperate for a way to jump-start the British economy. The collapse of Lehman Brothers in 2008 sparked a domino effect in global credit that came close to sinking the UK’s banking sector, and huge parts of the country’s wider economy with it. London needed new, bootstrapping ways to attract jobs and boost property values, and the government chose Silicon Valley as its blueprint.
In Cameron’s first speech about Silicon Roundabout, he said: “Right now, Silicon Valley is the leading place in the world for high-tech growth and innovation. But there’s no reason why it has to be so predominant. [The] question is: where will its challengers be? Bangalore? Hefei? Moscow? … London could be one of them. All the elements are here.”*
In framing his strategy this way, Cameron tapped into a new idea in the field of urbanism that was capturing the imagination of policymakers all over the world. They had come to believe that economic growth was primarily driven by “innovation clusters”—hubs where “new technologies germinate at an astounding rate and where pools of capital, expertise, and talent foster the development of new industries and new ways of doing business.”*
Cameron’s inspiration came from a US academic named Richard Florida, whom the Guardian newspaper dubbed the “rockstar of regeneration” and the “patron saint of avocado toast.”* In a 2002 book that made him famous among policymakers, The Rise of the Creative Class, Florida argued the internet made it possible for any place to be the next Silicon Valley—if it could successfully attract young knowledge workers, a group he termed “the creative class.” It was a buzz phrase peppered throughout Cameron’s speech.
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The thinking went like this: When a company succeeds, its founders and executives re-invest their earnings into a local ecosystem of related and complementary businesses. By concentrating an industry’s top talent within a single district, that investment was more effective and sparked a chain reaction of network effects. Highly qualified specialists move in, salaries rise, property values increase, and new service jobs are created. Knowledge workers’ earnings flow down to personal trainers, cleaners, and restaurants, and everybody lives happily ever after.
Cameron was elected on a platform of austerity and fiscal responsibility, which made the idea of innovation clusters irresistible. Rather than splash big money on new infrastructure or building schools and hospitals, Cameron’s government would focus on attracting tech talent and elevating London’s vague reputation as somewhere “hip.” Like many others in policy and urban development circles at the time, he believed replicating Silicon Valley’s success was as simple as getting knowledge workers together to network with venture capitalists (As the co-founder of Y Combinator, Paul Graham quips in his 2006 essay How to Be Silicon Valley: “You only need two kinds of people to create a technology hub: rich people and nerds.”*)
In the same speech, Cameron unveiled a new “entrepreneur” visa. Applicants had to have startup capital of £200K ($270K) and a “convincing and viable business plan” that would create at least two local jobs.* While this provided an enticing new route for the wealthy to enter the UK—akin to the golden visa programs featured earlier in the book—it did almost nothing to attract “nerds” to East London.
In fact, McKinsey—the professional services firm to which Cameron outsourced the creation of his innovation cluster—had doubts about the long-term viability of Silicon Roundabout from the beginning. The firm’s consultants were concerned that rapid gentrification would price startups out of the area and kill the hip vibe the project needed to succeed. McKinsey’s first public report flags design flaws in the visa program too: “There was a very clear request from the East London [business] community for the government to review current visa criteria, with the associated prevention of talent flow into the country being cited as a critical barrier to business growth … The main issue for [overseas] entrepreneurs remains the capital requirement.” In other words, not a lot of young global talent has a couple hundred grand lying around.
By 2013, two years after Cameron’s speech, speculation was mounting about the outcomes of Silicon Roundabout. Newspapers noted skyrocketing property prices in East London,* but nobody was convinced that any innovation was actually taking place or, if it was, whether Cameron’s grand vision had made any meaningful difference. Matthew Clifford, co-founder of the global startup accelerator Entrepreneur First, offered a generous perspective: “even when things are overhyped, hype can have very positive consequences. If you attract talent and capital to a place, to a scene, then even if actually, there’s less there than meets the eye, you do get some positive spillovers.”*
Whatever benefits may have spilled over into East London faded with each year. When a new Prime Minister replaced Cameron in July 2016, she didn’t share her predecessor’s enthusiasm for Silicon Roundabout. Given the circumstances of her appointment, Theresa May had other things on her mind—like Britain’s unexpected decision to leave the European Union. Without a Prime Minister fronting the project, the cracks in Silicon Roundabout became difficult to ignore.
In less than a decade, the “innovation cluster” envisioned for East London had materialized as just another overpriced business park. Property developers, attracted by the buzz, bought up the area’s real estate and raised office rents beyond the rates most startups could afford. Between 2015 and 2017, the number of new businesses in the area fell by 70%.* Rather than advancing disruptive companies that could compete with the US tech giants, East London became a high-end office district suitable not for scrappy nerds with big dreams but for major corporations with cold, hard cash. Shoreditch became the scene of frequent, sometimes violent, anti-gentrification protests.*
In March 2019, the UK government finally admitted the Silicon Roundabout project was dead. A statement shared in Parliament conceded that Cameron’s entrepreneur visa had attracted “low quality projects which contribute little or nothing to the wider economy.”* The visa program was unceremoniously scrapped shortly after.
The final nail in Silicon Roundabout’s coffin came in April 2020, as the first wave of COVID-19 spread and London’s offices, coworking spaces, hipster cafes, and street food pop-ups emptied. Within months of the UK’s first lockdown, Tech Hub, where Cameron originally pitched his vision, closed its doors for good,* and East London’s most over-hyped roundabout fell eerily silent.