The Greater London Authority (GLA) launches yet another digital initiative. This time it's the 'Great London Tech Census'. So together with the Coalition's Superconnected Cities scheme and London's UK Tech City intiatives, Mayor Boris now wants to get a 'detailed picture' of this 'booming industry'. 

What a lot of pap! I really do hope that not too much public money is being wasted on this. Aims such as to help policymakers through social media analysis so: "they can highlight which areas in the world are talking the most about London tech and therefore help organisations like Tech City UK focus their attention" are absolute bunkum. Organisations like Tech City UK should already know where  the tech clusters are in London since they have had enough public money and Google help to do so. In fact, the Tech City UK organisation in its present form is turning out to be a colossal waste of public money. As we run up to the general election, it's turning into the Conservative Party's poodle!

‘Tech City movements' need to be locally focused (at, say, borough level) since all 32 London boroughs are different. The volunteer driven Croydon Tech City group is a good example of how this should work.

And pray tell, what aspects of this Great London Tech Census make it a 'big data' project? A few crappy data points from Companies House data that are probably out of date or irrelevant to what the organisers are trying to achieve since so many companies file serviced office addresses and abbreviated accounts. And what Internet Entrepreneur in their right mind will volunteer commercially confidential data to a project which has as its underlying principle: "Hi, we're from the Government and we're here to help!”?

If it really wants to add value, government elected representatives and officials at all levels (but particularly at the level closest to the communities from which businesses grow) should be helping tech companies to PRACTICALLY be able to SCALE their propositions and OPERATIONALISE the innovative ideas that so many of our young people come up with but can’t turn from vision to reality!

See here article which gives policymakers a good place to start...

Today I speak in an afternoon panel debate entitled 'Investment and Policy Options' at the Tech City 2014 conference. When I was originally sent the proposed agenda a few months ago the session was simply labelled 'Investment'. Since one of my other incarnations is to consult with an investment committee for a small (£300m) investment fund (see the recommendations on my LinkedIn page) and consequently attend a lot of informative, big institutional, events in The City listening about 'investments' I pushed back to the organisers and suggested that they add the 'Policy Options' bit. Fortunately, they agreed and I present something here which simply encapsulates my current thinking on UK digital policy.

Over the past couple of years I have been fortunate enough to have worked on projects related to the Government's Digital By Default initiative - see HERE - and also witnessed the effects of Broadband Delivery UK's (BDUK) £100m Connection Voucher Scheme (CVS) - See HERE. Putting these experiences together with those I have as an Internet entrepreneur results in this "Policy Pentagon – The Five Forces That Create a Successful ‘Tech City’". As denoted in the centre of the pentagon, the target of UK digital policy should be to: promote jobs, enterprise growth and economic prosperity. Successfully harnessing the forces operating in these five areas will deliver these things. Here is a brief outline of my presentation notes and my assessed scores out of 10 for how well the UK is doing right now in national policy terms:

Force No 1: Digital is a 'Hygiene' Factor
This event is called the ‘Tech City Summit 2014’. But all too often high profile policies on ‘Tech Cities’ substitute for UK Digital Policy. It’s almost as if the sexy bits of digital, i.e. the (very few) young people who make their millions from digital start-ups, are proffered as a sign post for the UK’s digital success. In fact, practically all aspects of the UK economy will be impacted by digital technologies. Over the next decade hi-speed broadband connections will be as essential for business success in all sectors of our economy as having a safe place to work. Two mega trends are the reason for this: The Internet of Things – where more and more inanimate objects are reporting back to the Cloud on how well they are performing the task that humans have set for them; and, the ‘sharing’ or ‘collaborative’ economy, where digital connections make it easy to share the value of human and physical assets. Money Week Editor, Merryn Somerset Webb, writing in the FT (26/4/14) estimates the value of the ‘sharing economy’ to UK consumers in 2013 at £4.6B through the use of such sites as Parkatmyhouse, mondaytofriday, zopa, Uber and Airbnb (the latest fundraising rounds for the last two valued the web properties at $18.5B and $10B respectively).

Score 7/10: Digital By Default is the government’s transformation of public facing transactional systems. The Coalition has rightly recognised hi-speed Internet as an economic priority for Britain. But the structure of the broadband market with a powerful BT at its Open Reach centre is bad for Britain and is slowing the roll out of fast internet to business.

Force No 2: VC Money Backs People and Propositions
In the digital space, venture capital money backs people and propositions (rather than mere technology) who ride the latest digital themes. Right now these are: mobile, location, social, health and productivity. In many cases technological advantages are short term and ephemeral. Whereas the combination of a good proposition and competent people can pivot towards success as they roll out their business and face the reality of market forces where rubber hits the road.

Score 8/10: The UK is blessed with great financing options for all types and sizes of business from traditional bank support (yes it's still out there), VC and crowd funding to an AIM listing and City restructuring. Several government schemes are also good for start-ups. But the Technology Strategy Board still backs technology-led bids with its millions in government funding. This is sub-optimal and must change.

Force No 3: Policy Accentuates Scale and Managing on the Margin
One of the most important lessons of business management is that success is a result of making good marginal decisions. (see also: “It’s the NUMBER of decisions Stupid!” HERE). These are the everyday judgement decisions that from an analytical point of view are not clear cut – they could go either way. Often they deal with boosting relationships and cash flow. Together with a business’ ability to scale getting more of these decisions right is a recipe for great success. A national digital policy that helps support its business people with coaching, mentoring and training in these areas will reap big rewards.

Score 5/10: This is an under-appreciated aspect of UK national digital policy and the government has it only half right. Too much emphasis is placed on finance and 'hard' factors like office space rather than the softer but critical support aspects of growing a business. Some of the major tech firms in world started in their founder's garages. At the critical time when they were formulating their initial propositions they didn't need an 'office' - they needed any space where they could think and collaborate. The number of companies newly registered at Companies House may well be at record levels but the percentage of these that register for VAT is lamentably small which indicates turnovers don't meet the VAT threshold and are either dormant or one person operations. To reach an enterprise growth tipping point, UK start-ups must scale.

Force No 4: Avoids Form over Substance
By its very nature crafting a UK digital policy is a political process. Vested interests have to be assuaged and coalitions formed. Yet this should not mean that form triumphs over substance. Neither, because the digital universe tends to be governed by short form communication (140 characters the norm?), does good public relations act as a substitute for well thoughtout policy. The Labour Party's decision to support London Black cabs against the sharing economy Uber App is a case in point. Suppose this world changing Internet start-up was started in Britain as a result of UK digital policy. Would the Labour Party still feel the same way? One of the best ways that digital policy can help start-ups scale is to offer them operational gateways to resources that can achieve this. Linking up with low cost 'coding locations' in other countries (Hyderabad? Belarus?) can help UK start-ups follow well-trodden paths to turn their intentions into reality.

[NB: At present, England's schools lag in the teaching of maths thought to be an essential basis for good coding but rank highly for international 'problem solving'. The Indian state of Andhra Pradesh (now with Telegana) produces 250,000 engineers coder graduates a year! Has the UK lost its international competitive advantage in this area?  The UK often leads the way in coming up with creative solutions and ideas which other countries capitalise on commercially. UK Digital Policy should not allow our Internet entrepreneurs to fall into the same trap.]

Score 5/10: Current digital policy for start ups is focused too much on the ‘Tech City’ concept in east London. The whole of Britain needs to be included in national policy if we are not to perpetuate the north-south divide.

Force No 5: Localism is the Political Currency
Even if any future government is to extend the Tech City concept nationally, geography matters since global capital follows local policy. The number of multinational companies returning to UK shores as a result of corporate tax changes evidences this. In formulating national digital policy ‘localism’, taking political decisions at the level closest to the communities affected, matters. In the UK, most digital policy decisions are best made at unitary local authority level. One important aspect missing from current central government initiatives is getting local councillors involved in creating the relationships with towns and cities in foreign jurisdictions that can help UK businesses scale. Traditional ‘twinning’ schemes between UK and overseas local authorities may have had a bad rap. But similar arrangements that help build markets and structures that encourage UK entrepreneurs to build profitable relationships should be part of national policy. In fact local twinning schemes and active participation from knowledgeable local politicians can help build the operational infrastructures and markets that local entrepreneurs can capitalise on. 

Score 4/10: Far too much of the UK’s current digital policy is run from central government departments or through quangos (quasi non-government organisations). Local councillors in many parts of the country have their finger of the pulse of local business (many are in business themselves) and should play a bigger role in developing their local economies. The Prime Minister should take local councillor delegations and entrepreneurs with him to India when he visits newly elected Prime Minister Mohdi.

Download a PDF copy of the Policy Pentagon here

Update Post 18Mar14. A few of you have asked me why it took so long after completing this article for me to post it below (Written 25Feb14 Posted 10Mar14). This is the reason: I sent a copy of the article to a woman called Sarah Marsh at The Guardian for potential publication. She immediately emailed back with:  “Thanks - this looks interesting. Will take a look and get back to you if it's something we can publish Sarah”.  About a week later, after a hack friend of mine subbed the piece (“Too many CAPITALS as usual Gary!”), I sent her the new copy.  She immediately emailed back with:  “Thanks - this looks interesting. Will take a look and get back to you if it's something we can publish Sarah”.  Then sometime after, Sarah Marsh called me to feedback that it was OK but that The Guardian wanted me to state how UK local government can really make a difference to 'Tech Cities'. I must say that I thought she was either winding me up or having a laugh. As a free marketer and former councillor, I never thought that I would submit anything to 'The Grauniad'. As a past press officer for the Conservative Party I should have known better. Already in the piece below I was recommending more money for councils to ‘Twin’ with overseas tech cities and that government funds should be used - through the Technology Strategy Board (which she had never heard of!) - to fund entrepreneurs overseas trips! This was, for me, already verging on Commie territory!  In case you don't get it from reading it, this article is supposed to scream: "It's NOT about the damn GOVERNMENT(s), Stupid!" (there's those pesky CAPS again). Anyway, I politely asked her to send the points she wanted me to make in any amended article in an email. Haven't heard from her since.

Written 25Feb14 Posted 10Mar14. Over the past weeks I have witnessed how three cities, two in the UK, the other in India, are set up to help digital business achieve successful commercial scale. This is a tale that has important implications for Britain’s development as a modern digital economy. Although all three are described as tech cities, how they are constituted and supported by their respective governments and the value that they add to their local economies is very different.

Hyderabad is a second tier Indian IT city after the likes of first-tier Bangalore and it is soon to be the capital of the new Indian state of Telangana, created out of the southern state of Andhra Pradesh. It’s a bustling city ravaged by democratic political intrigue and dust from constant building on a vast scale. It also hosts a sizeable presence of some of the tech world’s biggest brands: Microsoft, Thomson Reuters, Amazon, Facebook and Infosys. Hyderabad ‘Hi-Tech City’ is described as a major technology township which is at the centre of the information technology industry. 

By contrast the ‘tech cities’ in East London and the Borough of Croydon aren’t so much characterised by their geography or infrastructure as by disparate ideas exemplified by the context surrounding this tweet from the prime minister at the height of the weather crisis: ‘Great to see the UK's digital community coming together to develop tech solutions to respond to flooding @TechCityUK.’ At the same time the Twitter feed of @TechCityUK, the official government funded quango that supports technology start-ups, was full of photos of a #Floodhack organised “following an emergency meeting at 10 Downing Street” with bone dry coders hunched over their laptops being filmed by television crews seeking to “use Govt data to help UK flood victims”.

In reality the information and communications technology agenda, as promoted by government supported @TechCityUK and its volunteer-driven, community based namesake in Croydon, are more akin to a political movement than part of the a co-ordinated digital strategy, like the Government Digital Services’ Digital By Default initiative. As a result both suffer from not having any serious national economic intent. They appear to exist primarily to inspire, encourage, network and agitate.

Unlike in Hyderabad, where constant construction and round-the-clock working are emblematic of India’s resurgent economy, the effects of the UK tech city movement are too often short term and opaque, a sugar rush for a politicised digerati in an internet-of-things-always-on virtual bubble. For example, according to the BBC, London Tech City boss Gerard Grech said events such as #Floodhack “force government to be more responsive” and “give up control” of its data. Responsive to what exactly is left unsaid. The needs of tech entrepreneurs? The crisis afflicting residents of the Somerset Levels? Who knows? A few apps selected by a ‘Cabinet Office judging panel’ on the basis of 90 second pitches gets the Prime Minister excited.

In the ten years I have been travelling to Hyderabad to oversee software and Big Data projects, that city has morphed from a bumbling provincial municipality with no traffic lights, where passengers had to haul their luggage through the baggage flaps on the carousal at a third world airport, to a thriving metropolis with a first world airport that operates 24 hours a day and is connected the 14 miles to the city centre (with traffic lights) by non-stop elevated road access.

Today Hyderabad’s young digital business owners covet commercial scale. They are just as likely to arrive on the doorstep of a UK software prospect (for an appointment booked by a Hyderabad sales team working through the night to accommodate US and UK time zones) and propose a revenue share or equity stake partnership deal to promote growth as they would a straight payment for hours one. Most of these IT shops employ more than 100 people and the D-Gens who own and manage them are focused on making money and Donald Trump’s ‘The Art of the Deal’. Ironically, in high tech Hyderabad, paper still plays and in bookshops business and self-improvement books are piled high and make the bestseller list.

Nothing might personify the national economic intent of India’s structural reforms, engineering and maths education focus and tech cities’ strategy than the appointment of Hyderabad-born technologist Satya Nadella as chief executive of Microsoft. Born in 1967 Nadella received a bachelor's degree in electrical engineering from Mangalore University and is a forerunner of what is to come for the tech world globally as a result of India’s emergence as critical part of the global ICT supply chain. Hyderabad’s D-Gens now have a new hero to go with the Microsoft campus in the city which is the largest outside of Washington State.

In the UK the stories of our tech heroes - from legendary inventor Sir Clive Sinclair to world changing Apple designer Sir Jonathan Ive - highlight the weaknesses of our tech city movement. Sir Clive was a remarkable man who inspired a whole generation of computer professionals but couldn’t scale any of his businesses commercially. This millennium, in order to achieve scale globally, Sir Jonathan took his design skills to the US.

For the past 25 years parts of East London and Croydon town centre (full disclosure: I have been contracted with Croydon Council on some digital projects recently) have looked like the South Bronx circa 1970 but with pigeons. In East London, as regeneration gets underway, the tech city movement develops, coordinates, promulgates, revises, amends, interprets and extols its message for “London to be recognised as the best place to imagine, start and grow a business”.

In Croydon the community-based tech city movement of volunteers is inspired by the remarkably energetic Jonny Rose, a self-proclaimed ‘Christian and product evangelist’. One hundred people regularly turn out once a month at borough meetings to talk up Croydon’s revival as the next Silicon Junction. ‘Scalability’ of new internet businesses is a term that features at these meetings where ventures of 20 plus people are considered ‘big’. While overseas growth and international partnerships are not high on the agenda, speakers often claim that they are motivated by something of a higher order than money. The ‘Art of the Deal’ is not a bestseller, though fixing the failing UK education system to inspire a coding instinct and love of technology in young people is promoted, as is networking within the south London locale. In short, Sir Clive’s ethos is alive and well.

So where does this leave a role for the UK government in helping Britain’s digital startups achieve the commercial scale to become world beaters? From this tale, helping to connect all these tech cities on both a macro and micro scale is a good place to start.

On a micro scale the government needs to encourage relationships that support the UK’s comparative advantage in invention and proposition development. It should also recognise that its efforts to produce school leavers with a penchant for maths is not delivering quantity at a world class level. Importantly, the UK still has a big lead in the entrepreneurial creativity that can help scale, coordinate and power India’s engineering prowess to build companies with great global value. The UK tech city movement needs to focus their efforts on helping their digital businesses make money from operationally scaling this creativity not by attracting PR attention and government subsidy. Despite its poverty numbers India produces hundreds of thousands of engineers and maths graduates each year. Many speak English and are good coders and even with the emergence of new object-oriented programming and agile project management techniques, bulking up developer resource is a key requirement in most attempts to successfully scale and enhance digital properties commercially. However, many of these Indian graduates are not worldly. Their views of world markets are skewed by the prism of entertainment television and they struggle to think outside the box. 

On his next trip to India the prime minister should take startup entrepreneurs with him and not just industrial titans to network with local Indian entrepreneurs. Competition for places on a trip like this should be judged by the Technology Strategy Board which should also fund the places for successful applicants since this quango is not optimising the value of the public money it currently spends.

On a macro or infrastructure level local councils in areas where they have tech city movements such as in East London and Croydon should be given central government grants to enable local councillors to create meaningful economic twinning agreements with their Indian counterparts. There are many lessons that the public sectors in both countries can learn from each other.

By implementing these low cost, high return policies, the UK government can help the country’s digital economy to scale and compete more effectively with the United States’ world dominating Silicon Valley. To achieve this may create the biggest tale of them all.