A Tale of Tech City, a new report by think tank Centre for London, provides the most detailed picture yet of the inner east London digital economy, with some real data on the connectivity issues in and around east London. Emma Vandore, co-author of the report, outlines its findings and the issues facing tech companies for whom fast broadband is a necessity
In Tech City, the self-proclaimed digital capital of Europe, getting hooked up to the internet can take weeks, if not months. Many complain that if a company like Instagram set up in Tech City a fair chunk of its 18-month lifespan would have been spent getting connected rather than getting it bought by Facebook $1 billion. While Silicon Valley startups are unrolling their great ideas, their London counterparts are on their mobiles trying to get a phoneline installed for their funky new office.
But is the broadband issue really that bad, or is it just that the British like to moan? A Tale of Tech City, the new report by think tank Centre for London, the most detailed picture yet of the inner east London digital economy, provides some real data to hang your gripes on. We conducted in-depth interviews with entrepreneurs randomly sampled from the Tech City map, the most comprehensive listing of digital businesses in the area. We complemented this with micro-level data on employment and firms. Over a third of companies mentioned broadband or wifi as an issue.
“You almost need to hire the office for two weeks before moving into it, just to get internet set up,” said one entrepreneur whose staff ended up working out of a local café or the Hoxton Hotel while they waited for internet access. “It’s not a good way of doing business. You want everyone to move in and feel proud of their new office.
We found three linked issues: public internet access, broadband access time, and (for some) broadband speed. For individual entrepreneurs and startups in their first days, public internet access – mainly through wifi – is an important tool in getting work done. But free wifi can take some finding.
“There’s not enough cafes where you can sit down and get free wifi,” said one. “Why isn’t there free wi-fi all over the area?” said another.
As firms move into their own premises, long access times for new broadband links are a common complaint: Entrepreneurs in a hurry who have all the tough things in place – the great idea, the perfect team, and the funding – find the time it takes to get the office up and running incredibly frustrating.
“It’s not so much that there isn’t good broadband here, it was more of the six weeks to eight weeks-time lag before it’s actually installed,” said another startup.
Sometimes delays are caused by a complex set of coordination issues. Landlords need to give explicit permission for new broadband connections; some connections may involve roadworks; and internet service providers have to work with separate infrastructure companies to wire up buildings.
Once connected, another issue is bandwidth. Not everyone needs superfast connections, but for some, particularly those working in video or media, high-speed connections are essential.
“It’s not 1950,” said one frustrated entrepreneur. “We can’t call it Tech City if the guy next to me is sucking all the broadband and I’m at the end of the line, that does make sense.”
For many, the issue rankles given the government interest in the area. If we’re building a world-beating digital economy cluster to rival Silicon Valley, surely some state-of-the-art infrastructure would help?
By international standards, UK broadband speeds are not the worst, and have been improving. However, Britain needs to make substantial investment in its broadband network, over and above funds currently announced, to compete with broadband speeds in say, South Korea. There are also concerns that the UK regulatory framework, which has focused on price competition, has been less successful at improving minimum service standards, encouraging investment and technological change. Current disputes over 4G roll-out are the most recent example of this, with 4G now not arriving here until 2013. US experience suggests that 4G will become an important complement to wi-fi; digital economy firms will need smooth access to both technologies.
Our report puts forward three recommendations. We would like to see ISPs guarantee a two week connection time, where cabling and landlord permissions allow. Secondly, we suggest workspace providers consider integrating broadband into their basic rental packages, or include permission for connection within lease agreements. Finally, we propose that the GLA monitors connectivity in inner east London and other digital hotspots in the city to ensure they are well served by wifi and 4G transmitters, possibly drawing on the Urban Broadband Fund, the £100 million government pot for improving connectivity in selected UK cities.
Will that be enough to create the next Google? No, but it’ll sure make doing business in Tech City easier.
A Tale of Tech City (Nathan, Vandore, Whitehead 2012) from Centre for London.