The Telegraph’s Damian Thompson has issued a staggering rebuke to the Government’s tech start-up strategy in east London. We only wish we had his heavenly turn of phrase.
Saturday columnist Damian Thompson will issue Shoreditch entrepreneurs and the Tech City Investment Organisation a vicious rogering in tomorrow’s Telegraph (available online already), describing east London’s start-up founders as “luvvies”, raising doubts about the quality of their business ideas and drawing attention to their dependence on public money and state support.
Thompson, whose compulsive new book The Fix was serialised by The Kernel in May, is the Telegraph’s blogs editor, not an out-of-touch print-era hack, which is likely to lend his criticisms additional weight. Thompson has clearly done his homework on this one: his column echoes many of the same concerns The Kernel has expressed about a growing entitlement culture in east London, the accelerating socialisation of venture capital and the inefficacy of the Government’s efforts in Shoreditch.
He acknowledges that “the area’s 200 or so internet start-ups are brimming with talent and enthusiasm”, but complains that the area is “not producing results to justify the rhetoric”. It’s hard to argue with that assessment, when you remember how low the bar for success is set in Europe: cast your eye over the tech blogs and you’d think raising venture capital is cause for celebration in itself.
Thompson’s column is significant because it marks the first occasion that a mainstream journalist writing for a general audience has taken UKTI to task for its faulty strategy in east London, which focuses on mobile apps and social networking tools at the expense of the rest of the technology industry. He argues, correctly, that the verticals and geographies that actually create jobs and contribute to GDP – for example, enterprise software and the M4 corridor, which David Cameron has himself described as “Britain’s Silicon Valley” – are being unfairly ignored in favour of sexier consumer start-ups in trendy Shoreditch.
In other words, graphic designers, user experience geeks and ex-McKinsey consultants who now describe themselves as “entrepreneurs” have been tempted into the area with the promise of easy money from Enterprise Capital Fund-backed early stage venture firms, but they are failing to come up with the goods. Might it have been more economically valuable, albeit less attention-grabbing, to concentrate on the areas in which Europe has traditionally excelled, hardware and enterprise software?
The column is also likely to spark wider debate about the political consequences for the Tories of investing in a sector that does not contribute to the economy and within which outrageous “art project” stunts such as Koran shreddings are known to occur. It also underlines the vast psychological gulf between the ruthlessness of the Valley and the laziness and complacency of Europe.
“One thing UK start-ups consistently fail to do,” writes Thompson, “is spot the Darwinian savagery of the business strategies that lurk beneath the quirky slogans of Palo Alto … [This] supposedly adventurous sector of the economy is infected by a sluggish dirigiste mindset that owes more to Brussels than to California.”
We struggle, reluctantly, to disagree.