The Tech City initiative sets out to play a significant role in building a digital cluster in East London for the benefit of the UK and the global digital economy. This report explores a range of options for developing the cluster and maximising opportunities for future growth. It is based on an analysis of international experience of clusters and a body of evidence drawn from interviews with more than 40 digital entrepreneurs, other stakeholder companies and government officials.
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East London’s technology entrepreneurs have prepared the ground for a successful technology cluster that benefits from the capital’s competitive advantages and has the potential to make a meaningful contribution to the wider economy. But its prospects for success can be significantly enhanced by learning from international cluster experience and implementing some of the suggestions of those already involved in the East London cluster.
Government-driven efforts to stimulate clusters have a mixed record. International evidence suggests that creating a successful cluster is challenging: for instance, only half of the clusters in emerging markets have grown more quickly than the wider economy. Lessons can be learned not only from successful clusters overseas, but also from those that did not succeed.
The report identifies six factors that contribute to success:
- Recognise and communicate the timescale needed for success
- Recognise the appropriate level of commitment
- Take care with the threshold requirements for companies to qualify for or participate in initiatives
- Consider the location and target sector for the cluster, and revisit them over time
- Don’t focus solely on local development
- Don’t neglect the wider ecosystem in order to maximise the economic impact of the cluster.