Is London's Tech City the new Silicon Valley?

Trendy Shoreditch and David Cameron - not a natural pairing one might think.

But it was in this up-and-coming area of East London that a group of forward-thinking entrepreneurs and investors gathered on 4 November 2010 to listen intently to what the British Prime Minister had to say.

Cameron, slightly stiff and besuited, with a politician's ear for a soundbite, announced his intention to turn East London into Britain's version of America's Silicon Valley.

He said: "Right now, Silicon Valley is the leading place in the world for hi-tech growth and innovation. But there's no reason why it has to be so predominant."

With the Shoreditch Roundabout area already nicknamed "Silicon Roundabout" thanks to the large number of technology companies situated there, it all appeared plausible.

The move, it was hoped, would create thousands of jobs and establish the seeds of a fast growing industry to boost the UK's economy.

Part of the Olympic Park in Stratford was to provide office space, creating an all-encompassing "Tech City" to house everyone from small start-ups to massive corporations such as Google.

Barclays would set up a new facility in the area and offer specialist banking services, while special visas for foreign entrepreneurs would be introduced.

Eighteen months on and where do we stand? The latest figures sound impressive -  there is a Tech City, and within its parameters are more than 1,100 tech and digital creative business, split into 17 categories -  including 3D & Animation, Data Analysis, Digital print/publishers and Gaming and Mobile Apps.

Speaking to experts at the Digital London conference this week, Yahoo News! found hopes remain high that the dream can still become reality - but the mindset has now subtly changed from a straight-forward copy of the Californian model to a more nuanced appreciation of what made it work in the US and how that could be translated to UK realities.

Kulveer Ranger, the London Mayor’s Director of Environment & Digital London, told Yahoo! News: "Nowhere is ever going to be like Silicon Valley. It is unique and has been going decades and is about development of technologies.

"But London has the opportunity to bring new innovation and new technology to the fore to help the city work better. This can then be used in other global cities.

"The Mayor is focused on this. Yes it will deliver jobs and investment but we as a great big city have deep assets that will enable this to happen such as finance, legal, universities and creative minds. It is a melting pot that can really support the delivery of the technology revolution that's going to happen."

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His view is echoed by Elizabeth Varley. She formed Tech Hub nearly two years in East London as a place for start-ups, developers and anyone with an interest in technology to work and network.

She believes the answer lies not in copying the Silicon Valley model but instead shaping our own connected space for the future.

Most importantly, she says the key is to encourage big established technology businesses to come together with small start-ups and learn from each other.

Elizabeth said: "Silicon Valley does Silicon Valley very well. It's easy to forget the 60-plus years of significant investment from a large military-industrial complex that went into the area.

"What we want to celebrate is the unique position London is in that's rarely replicated elsewhere. In one city we have the country's centres of government, finance, technology - everything.

"We should be focusing on what we can do with that, learning from the successes (and failures) of other communities and cities, and creating something that's well above comparison."

Andrew Humphries, of the Tech City Investment Organisation, is the man responsible for pulling the different strands together on behalf of the Government's UK Trade and Investment arm.

Mr Humphries said: "We looked at successful clusters across the world like Silicon Valley and found we have four key aims.

"First, to promote the organic eco-system that exists. We don't claim to have created it or want to artificially support it. We want something self- sustaining.

"Secondly, to support entrepreneurs and foster new entrepreneurs within the UK to think about doing working in Tech City.

"Thirdly, engaging large organisations like we have with Google, Intel, Cisco and Vodafone.

"All such clusters including Silicon Valley have these and the smaller businesses need them to partner with.

"Fourthly, we talk to investors and get finance in from all around the world."

But he added: "Our fifth aim is we must also fuel the talent pool for smaller businesses and work with schools, colleges and universities to ensure they have the right programs for providing the right skills to get students involved.

"This is an organic environment in a downturn. There is a lot of doom and gloom but here we have got a cluster of growing businesses in the tech environment selling to companies all over world."

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Google is one of those big names already committed to Tech City. It has taken a seven-storey building in Shoreditch, called it Campus and will use it to offer desk and meeting spaces and advice for online entrepreneurs wanting to create the next Google.

A Google spokesman said: "Tech City is already home to hundreds of world-leading developers, entrepreneurs and ideas. Campus's goal is to fuel the success of the UK start-up community."

But Milo Yiannopoulos, editor of The Kernel, a new technology and culture magazine, has long been a sceptical voice regarding the plan and believes the issues are far more complex to solve than politicians simply naming an area.

He says David Cameron's confusing acknowledgement in January that the M4 corridor is Britain's Silicon Valley is just one anomaly. Big names such as Intel, Oracle, Panasonic, HTC, Vodafone, Microsoft, Adobe, LG and Symantec, among others, are already established there.

Milo said: "Assuming the UK is capable of producing a hub like Silicon Valley, which, given the red tape and high taxes in the UK, is unlikely, it will be along the M4 corridor, not in East London, where so-called 'Silicon Roundabout' start-ups are yet to make much of a dent in the economy.

"What the UK needs is less regulation, lower taxes and greater liquidity. Tech City is a pernicious distraction because it draws attention to a lot of 'nontrepreneurs' in east London at the expense of policy change that would affect everyone.

"The Old Street roundabout is an exciting place full of young people with great ideas, but it's a long way off being any sort of significant economic or cultural force. If it does achieve international success, it will be in spite of the Government's efforts, not because of them."

However, one of those successful start-ups is Shoreditch-based Songkick, a site built around connecting music fans to seeing their favourite artists live. Last week it attracted more than £6 million in funding from venture capitalists.

Songkick's Chief Technology Officer Dan Crow, who worked for a decade in Silicon Valley, said: "The London tech community is still very new, maybe seven years old, but there has already been some big success stories such as Last.fm, Mind Candy, Tweetdeck and Shazam.

"There are also some large established companies coming into the area and this is healthy.

"We are not building another Silicon Valley here in East London. It is a real mono-culture there.

"Instead London is really diverse, which means you are surrounded by your customers. You are not in a bubble but among real people.

"We are a much younger set of companies in East London, learning together and it is a huge strength because it creates collaboration."

So, is East London the new Silicon Valley? Not yet. But why should it be?

The area around Shoreditch already has a fresh growing tech scene and if it can attract further investment and more big names that can only benefit everyone in the tech chain from the smallest freelance developer upwards.

This thriving tech scene is what will define London and Britain for decades to come, providing a wide range of new, exciting and dynamic opportunities for tomorrow's digital students and entrepreneurial minds.

Silicon Valley has nothing to fear from London's East End right now. But with the right investment and crucially a push on UK-wide education in technology-related subjects, the area could deservedly become a leading force in our global tech future.