Photo Credit: Paul Wilkinson
The modest beginnings of Silicon Roundabout
When Matt Biddulph jokingly referred to the area around Old Street in 2008 as “Silicon Roundabout”, the software designer had no idea that the phrase would soon become a byword for the wave of new tech companies flooding into east London.
In a few short years the area has gone from relative obscurity to the world’s third-largest start-up hub after San Francisco and New York. It has grown from 15 start-ups in its early years to over 1,300 at the start of 2014.
But is the end in sight for one of east London’s greatest success stories?
Some believe that Silicon Roundabout is set to be a victim of its own success, with soaring rents forcing out the same smaller businesses that made it what it was. In two years, rents in some areas have risen from £15 per square foot to £40 per square foot. For exciting new small and medium sized entreprises, costs such as these are sometimes prohibitive, forcing them to settle further afield.
Hannah Donovan, formerly of Last.fm, moved her current company, This Is My Jam, to Haggerston from Hackney because she felt that the area had begun to feel different. She explains that the “serendipitous meetings” that used to spark off new ideas had become less and less frequent.
“The main reason we moved was because of the vibe,” she said. “It didn’t really feel like a place we wanted to work in any more. We spend a lot of our time sitting in front of our computers so the people you randomly bump into are quite important. It’s all about who’s around and sharing ideas.”
“When we realised we could cut our rent in half by moving down the road, it was a bit of a no-brainer. It’s definitely less centralised now and my concern is that I don’t know where the next scene is going to be.”
Others are more optimistic about the future
Ian Dowson, a writer for Tech City News, argued in a recent article that real estate prices are a problem, but that the entrepreneurial spirit that used to characterise the Roundabout is just starting to spread out across London.
“It’s moved on from where it was in 2005,” he says. “It was very experimental back then and people didn’t really know what they were doing. Now, it’s the world’s third-largest company innovation system.
“I don’t deny that the pricing of real estate is a problem. Hackney is so near to the City that as the economy picks up real estate prices also go up quickly. However, I’m very optimistic about what will happen in London.”
