Paul Wallbank – Brilliant Communications

Category: economy

  • Cities of Industry

    Cities of Industry

    The latest Decoding The New Economy interview feature Laurel Barsotti, Director of Business Development at the City of San Francisco discussing how the city refound it’s entrepreneurial mojo.

    A notable point about Laurel’s interview is how she has similar views to Barcelona’s Deputy Mayor Antoni Vives about the importance of industry to San Francisco.

    For some time it was an article of faith in the Anglo-Saxon world that the west had become post-industrial economy where manufacturing was something dispatched to the third world and rich white folk could live well selling each other real estate and managing their neighbours’ investment funds.

    “Opening doors for each other” was how a US diplomat described this 1980s vision according to former BBC political correspondent John Cole.

    It’s clear now that vision was flawed and now leaders are having to think about where manufacturing, and other industries, sit in their economic plans.

    Barcelona’s and San Francisco’s governments have understood this, but others are struggling to realise this is even a problem as they hang on to dreams of running their economies on tourism, finance and flogging their decidedly ordinary college courses to foreign students.

    For some political and business leaders this is a challenge to their fundamental economic beliefs. It’s going to be interesting to see how they fare in the next twenty years.

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  • Measuring an industrial hub’s success

    Measuring an industrial hub’s success

    A short article appeared on London’s City AM website yesterday discussing the successes of Google’s Campus and the government’s Tech City initiative.

    What jumped out of that story is the quote from Benjamin Southworth, the former deputy chief of the Tech City Investment Organistion, that London’s first tech IPO is “probably 18 to 24 months away”

    Southworth’s comments raise the question of how do you measure the success of initiatives like Tech City, does a stockmarket float indicate success of business or tech cluster?

    The debacle of Australia’s Freelancer float which saw the shares soar over 400% on the first day of trading certainly doesn’t indicate anything promising about the startup scene down under apart from the opportunities for those well connected with insiders on Australian Security Exchange traded stocks.

    In London’s case, Google’s Campus gives a far better indicator of what tech hubs and industrial clusters can add to an economy – £34m raised from investors in the 12 months to October 2013, 576 jobs created and 22,000 members of its coworking space.

    Google’s statistics raise an interesting point about the different objectives for the stakeholders in incubators and hubs; entrepreneurs want money or glory, investors want returns, corporate backers want intellectual property or marketing kudos, governments want jobs and politicians want photo opportunities with happy constituents.

    These different objectives means there are different measures for success and one group’s success might mean bitter disappointment for some of the others.

    What the various partners define as success is something anyone involved in an incubator or hub should consider before becoming involved, in that respect it’s like a business or a marriage.

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  • Where will the jobs come from in the internet of things?

    Where will the jobs come from in the internet of things?

    One of the common worries about the internet of things and the automation of business processes is that many jobs are going to be lost as a consequence.

    This is a fair concern however we need to keep in perspective just how radically employment has changed in the last century.

    Concerns about technology displacing occupations is nothing new; in the eighteenth century the Luddite movement was a reaction to skilled workers being displaced by new innovations.

    In an interview with GE’s Chief Economist Marco Annunziata, published in Business Spectator, we covered this topic and Marco had a valid point that the bulk of the Western world’s workforce was employed in agriculture a hundred years ago.

    Today it’s less than two percent in most developed country as agriculture became heavily automated, yet most of those workers who would once have worked in the fields have productive jobs. “As an economist I look at this over a long term perspective and I’ve heard this concern about technology displacing jobs over and over again.”

    Annunziata sees new roles being created, among them what he calls ‘mechanical-digital engineers’ who understand both how the actual machines work as well as the data and the software used to run and monitor them.

    This isn’t to say there won’t be massive disruption – John Steinbeck’s Grapes of Wrath described the massive dislocation that happened in the United States with the first wave of agricultural mechanisation in the 1920s and the decline in rural communities is due directly to modern farms not needing the large workforces that sustained many country towns.

    We can’t see where the jobs of the future will be and just roles like as Search Engine Optimisation and ecommerce experts where unheard of twenty years ago, our kids will be working in occupations we haven’t contemplated.

    It’s up to us to give our kids the skills and flexibility of thinking that will let them find opportunities in a very different workplace.

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  • Raising a citizens’ army

    Raising a citizens’ army

    In the English Midlands the leader of Birmingham City Council, the wonderfully named Sir Albert Bore, recently suggested a ‘citizens army’ be raised to provide services such as libraries that are being affected by budget cuts.

    Bore’s suggestion is a response to his council cutting library services in the face of community anger and legislative obligations, to assuage both pressures it’s hoped local volunteers can continue to run and maintain the threatened facilities.

    The bind Albert Bore and the Birmingham City Council find themselves in is a quandary all communities and governments are facing as an aging population causes tax revenues to decline at the very time the demand for government services increases.

    Faced with cuts, many groups are going to have to take matters into their own hands to keep services running. Some communities will do this well while others won’t.

    It’s also going to be interesting to see how this plays over generations with baby boomers being far more likely to volunteer than their GenX or GenY kids, something probably caused by more precarious job security in the modern job market and the need for younger couples to work harder and longer than their parents to pay their rent or mortgage.

    Angry baby boomers demanding the ‘government ought to do something’ may well find the onus is thrown back onto them to provide the services they believe they’re entitled to.

    What is the most fascinating part of this predictable situation is how governments around the developed world have blissfully pretended that this wasn’t going to happen as their populations aged.

    Perhaps the biggest citizens’ army of all will be the voters asking why the Western world’s governments and political parties ignored  obvious and inevitable demographic trends for the last fifty years. That would be a question worth answering.

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  • London’s quest to be the next Silicon Valley

    London’s quest to be the next Silicon Valley

    In November 2010 British Prime Minister David Cameron set out his vision for London becoming the centre of Europe’s digital economy.

    “We’re not just going to back the big businesses of today, we’re going to back the businesses of tomorrow.” Cameron said. “We are firmly on the side of the high-growth, highly innovative companies of the future.

    Three years later London’s tech scene is booming with more than fifty incubators across the city and over three thousand digitally connected businesses in the Shoreditch district.

    Building London’s resurgence

    Gordon Innes, the CEO of the city’s economic development agency London and Partners, puts this down to a combination of factors including a young and diverse population coupled with being a global media and finance centre.

    At the time of Cameron’s speech the cluster of tech startups around Shoreditch’s Silicon Roundabout area was already firmly established and the British government was acknowledging the industry’s successes.

    “What we did, what the mayor did, what the government did,” Innes said, was to make sure that we removed as many barriers as possible to let the sector grow as rapidly as possible.”

    The value of teamwork

    Part of that effort involved business leaders, London & Partners, the mayor’s and Prime Minister’s advisers meeting on a regular basis to thrash out what the tech sector needed for the UK’s tech sector to thrive.

    “There were changes to the tax credits for R&D and an important one was the Enterprise Incentive Scheme,” says Innes.

    “Linked to that was a recognition of the need to link angels and high net worth individuals to be educated about the sector. It’s not just enough to balance the risk through the tax code.”

    Another success for the UK startup sector was the British government introducing an entrepreneur’s visa that makes the country more attractive to foreign founders of startups.

    Having built an community of tech startups, the city is now looking at how to grow the sector. “The big priority over the next few years is growing your business in London.” Innes says.

    “Making sure you’ve not only have access to angel finance but also to stage one and stage two venture fund capital, you’ve got access to capital markets through new groups on the stock exchange and the AIM market.”

    One of London’s big challenges is linking the city’s strong financial sector to the tech industry with a range of organisations like London Angels and City Meets Tech.

    Sharing the vision

    A notable point about the successes of London & Partners and Tech City UK is the co-operation between the levels of government along with having a shared vision of where the city should sit in the global economy.

    Having a unified, strong and consistent vision is probably the best thing governments can offer a growing entrepreneurial or industry hub.

    “Government can’t create that but government can certainly support it or, if it’s not careful, can destroy it,” says Innes.

    London is showing how to support a growing sector of their business community, other cities need to be taking note how they can compete in a tough global market.

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