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Can the UK Create Something To Rival Silicon Valley? 395 395

An anonymous reader writes "Hoping to bring together ambition, creativity and energy in one place, the UK government hopes to grow East London so that we can benefit from the same sort of success that has been seen in California; jobs, tax revenue, highly skilled workers and takeovers. If it works, the country would massively benefit, with something to rival other established industries."
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Can the UK Create Something To Rival Silicon Valley?

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  • Assange (Score:5, Insightful)

    by bradclarke77 (1900464) on Thursday August 30, 2012 @01:41PM (#41180351)
    A good start would be not offering to arrest and deport people who broke no law in your country.
  • A new wild west (Score:4, Insightful)

    by StripedCow (776465) on Thursday August 30, 2012 @01:43PM (#41180393)

    What we actually need is a new "wild west". A place where there are no artificial restrictions like patents, lawyers and what not so that innovation can flourish.

  • Stillborn (Score:4, Insightful)

    by udachny (2454394) on Thursday August 30, 2012 @01:44PM (#41180409) Journal

    the UK government hopes to grow East London so that we can benefit from the same sort of success that has been seen in California;

    - DOA, just like Russian version of Silicon Valley (Skolkovo).

    That is unless the government in UK is planning to get rid of regulations, taxes, labour laws and inflation of-course.

  • Quick Answer: (Score:5, Insightful)

    by qubezz (520511) on Thursday August 30, 2012 @01:46PM (#41180449)
    No []
  • Really? (Score:5, Insightful)

    by Sparticus789 (2625955) on Thursday August 30, 2012 @01:47PM (#41180459) Journal
    "same sort of success that has been seen in California; jobs, tax revenue, highly skilled workers and takeovers."

    What is the author smoking. California currently has $380 billion in devt [] and a 10.8% unemployment rate []. I would call that far from being successful.

    If I were the UK, I would not want to model anything after California

  • by Jeng (926980) on Thursday August 30, 2012 @01:58PM (#41180609)

    Also, no non-compete contracts.

    If there are enforced non-compete contracts then there will be no community of individuals to hire to create a "Silicon Valley".

  • by 7-Vodka (195504) on Thursday August 30, 2012 @02:02PM (#41180665) Journal

    It's a pointless question. Let me explain:

    Theoretically, the UK could try to accomplish this. The main barrier preventing any type of industry from flourishing in the UK is the obscenely high effective tax rate on human activity. (please give this typical figures, maybe in percentage if you're more familiar Brits)

    The UK could then make an attempt to relieve a certain location and industry of these high taxation burdens to have the locus flourish.

    The problem is that while this is a good move and should be applauded, simply cutting taxation on human activity without cutting the corresponding government spending doesn't solve much. The spending has to be paid for somehow, whether that is immediately by confiscating funds from other people and locations or somewhat delayed by building deficits and inflating the fiat money supply and thereby causing the mis-allocation of resources and bigger busts and recessions or depressions, people will continue to pay the piper.

    The only sure way to encourage industry to flourish is to cut regulation and cut government taxation and spending. Remember, most government taxation is appropriating funds from a more effective use determined by the market, and instead putting them to less effective use as determined by bureaucrats.

  • The boat sailed... (Score:5, Insightful)

    by jamstar7 (694492) on Thursday August 30, 2012 @02:04PM (#41180711)
    The boat sailed on a Silicon Valley workalike about 25 years ago. What with all the tech patents, software patents, business model patents, and patent trolls sewing up innovation unless you're already IBM, Microsoft, or Apple, you won't be able to innovate and defend anything What are they thinking, incubate and develop the next Facebook? The next PayPal?
  • Re:A new wild west (Score:5, Insightful)

    by Opportunist (166417) on Thursday August 30, 2012 @02:07PM (#41180753)

    Hey, Wild West swings both ways, ya know? You cannot tell government to stay out of your way and then come back whining when it does.

  • Re:Assange (Score:2, Insightful)

    by Jeng (926980) on Thursday August 30, 2012 @02:10PM (#41180783)

    Not sure why this is being labeled as offtopic, it is a legitimate concern.

  • No. They can't. (Score:4, Insightful)

    by gurps_npc (621217) on Thursday August 30, 2012 @02:12PM (#41180793) Homepage
    To quote Paul Graham ( and [])

    You need to find someone to pick the right start-ups. Those people are rare, and unlikely to work for a city.

    You need a pro-privacy, pro-free speach atmosphere, something that UK seriously lacks. (Cameras, libel laws, etc)

    You need a good source of well educated people interested in science, not business.

    You need a good place to live. Something that will attract smart people to live there besides the money. The UK is not sunny California.

  • Re:Stillborn (Score:4, Insightful)

    by cyphercell (843398) on Thursday August 30, 2012 @02:13PM (#41180815) Homepage Journal

    You forgot Berkley which contributed both Unix and of course LSD.

  • Re:Can they? (Score:5, Insightful)

    by EdIII (1114411) on Thursday August 30, 2012 @02:13PM (#41180817)

    I think that Silicon Valley and innovation these days mostly means software development and services on the Internet, and not so much hardware devices and operating system.

    I also wonder why technologically minded people would want to move to a place and innovate when you get arrested for a tweet. Now before +Troll, think about it for a second. Most people responsible for innovation these days don't like regulations constraining the Internet, and certainly not regulations and laws that get users thrown in jail.

    The UK truly is a pit of shit right now as far the Internet, freedom, privacy, freedom of speech, etc. is concerned. Not exactly attractive to most of the talent in the rest of the world. If you are already there you are just making the best of it.

  • by jmauro (32523) on Thursday August 30, 2012 @02:14PM (#41180825)

    California is broke because of Prop 13. It basically cut out from under it the main funding mechanism for the state government property taxes and then put severe limitations on how the state could raise funds through other mechanisms by making any tax increase in other categories like sales tax or income tax too difficult to enact. As such the previous high-tax/high-service government that Californians enjoyed became unstainable.

    Additionally, due to the initiative system the state has almost no control over it's finances. Something like 70% of the budget is mandated spending by initiatives, with a large portion of the remaining 30% either things you have to spend money on like police, or required via Federal funds. It's why to pass a budget every year they always need to resort to some tricks. And with the requirement that they need 2/3rds majority to pass any budget, instead of 50%+1 like every other state in the union, means the minority party has no interest to negotiate.

  • by mickwd (196449) on Thursday August 30, 2012 @02:15PM (#41180831)

    Indeed. The area around Cambridge has also been known as "Silicon Fen".

    Or what about somewhere like Manchester - a big city with an important place in the history of computing, a large, well-regarded university, and a large pool of experienced, well-qualified people?

    But no, once again it seems to be London that gets the attention.

  • Re:Really? (Score:5, Insightful)

    by Animats (122034) on Thursday August 30, 2012 @02:36PM (#41181133) Homepage

    Unfortunately, they're suffering from a massive case of survivor bias.

    Yes. At one time, when the Computer Museum was being set up, I suggested having an "In Memorium" wall with the logos of thousands of failed Silicon Valley companies.

  • Join the club (Score:4, Insightful)

    by IcyHando'Death (239387) on Thursday August 30, 2012 @03:09PM (#41181671)

    The world is full of urban centres that are trying to emulate the success of Silicon Valley. Ever heard of Silicon Valley North? No, I don't mean San Francisco. It's a term my home town, Ottawa, Canada, has adopted for itself. It's also been applied to Toronto, Vancouver, Waterloo, Calgary, and Montreal. But the truth is that none of them have a decent claim on the title -- they can't touch the real Silicon Valley in terms of scale, depth of expertise or level of innovation.

    There's a big barrier to anyone trying to be the new Silicon Valley and it has nothing to do with corporate tax rates or research incentives. Those are all easy to measure and copy. It's the network effect -- the same one that makes eBay, the QWERTY keyboard and Microsoft Office so hard to displace. The smart people want to go to Silicon Valley because that's where the smart people are. After all, being with other smart people is not only more interesting, but more likely to lead to your own success. It's easy to see in a place like Ottawa, where the cream of the tech community are frequent targets for Silicon Valley head-hunters. They go, not (just) for the money, but to be part of that scene.

    So good luck East London, but maybe you should have a plan B, just in case.

  • by Cederic (9623) on Thursday August 30, 2012 @03:17PM (#41181789) Journal

    Sure. Live in London and spend 30 minutes crammed in a sweatbox with other cunts to get to work, paying over a third of your salary in rent.

    Or live outside of London and work outside of London, with a gentle commute and a disposable income that lets you enjoy life.

    If the Government wants to create a new industry fucking base it outside of the overcrowded under-resourced stupidly expensive shithole known as the South East. There are entire swathes of the country with affordable housing, cheap labour and strong demand for jobs of all types. So fucking invest in them.

    Fucking London fucking bias. It fucks me off.

  • by Anonymous Coward on Thursday August 30, 2012 @03:22PM (#41181857)

    The largest problem California cities face is from the excessive costs of public employees, former public employees, and the related pension plans.

    That growing segment sometimes acts like a cancer looking to feed itself. Even the the regional impact of large box stores is negative (low wages, usually no health coverage for employees, most goods sold are imported, most profits leave the area), it is common for city managers to seek out such large stores to snatch sales tax revenues away from nearby communities.

    California also has the mixed blessing of many (largely illegal) immigrants. Those that have stayed long term (not seasonal workers) are a significant load on education and healhcare services. There are some other hidden costs, like insurance against uninsured drivers.

    There are relatively few manufacturers of basic components, with most now from Asia. One has to look pretty hard to find much large scale hardware manufacturing in Silicon Valley. Silicon is used in chips (hardware). Many seek their fortunes in software. For actual manufacturing with the surrounding support industries present, Germany is probably a better model to look at than Silicon Valley.

    Of course one could skip the making things part, and just have a community based on takeovers and outsourcing. It's about lunch time here. Care for a virtual hamburger?

    Even with proposition 13, city revenues skyrocketed as properties sold at higher and higher prices, making that 1% tax quite substantial. Foolish city managers funded excess growth and large salary increases. They tend to suck up as much revenue as possible. When you've got parasites on a bubble, problems should be expected.
    There's no reason to have Highway Patrol at time and a half overtime rates sitting parked by construction crews on the highways. Others could do that job at a tenth of the cost.

    Property and gasoline taxes were meant to fund essential productive services like education and highways. Cities shouldn't get either of those. They already get cuts of sales taxes, impose hotel taxes, parking fees, utility taxes, construction permits, and cook up a whole bunch of things they can fine people for. Most of the inflated salaries are going to unproductive functions. Some services would be better handled by volunteers, or contracted out as a sort of temporary limited term working welfare for the unemployed. Even many with disabilities can be given simple maintenance jobs.

    A central California community recently was fining homeless for sleeping in their cars. They came up with a plan to allow about 5 to have a place to park at night. The cost for six months? $60,000.
    Those people could have a place to live for what the city would spend for (city "public safety" employee supervised) parking spaces.

    If the U.K. can create a district focused on manufacturing, supporting, and installing energy producing/saving gear, that might work. It still might need subsidies, or be protected with tariffs on imports, to remain viable. Certain the idea is to improve and maintain the quality of life while having a healthy economy and environment. The cost of living should be kept low. Parasitic funding through things like tax on homes should be kept to a minimum. People and communities should be viable in a largely self-sufficient form. That means avoiding large outflows of revenue for manufacturing or energy, and operations that derive revenue from a community must spend/invest most of that in the same communities. Funding society on debt, and then having most of that wealth sucked off to make a very few extremely rich is not viable in the long term.
    It leaves communities sick, and too many unemployed or virtual slaves at a time when technology should have made life better for everyone. If the percentage of government workers owning homes is higher than that of the general population, you've got a parasite infestation.

    Some tax incentives for R&D may be healthy, but there must be strong controls to avoid economic leakage (the parasitic/exploitive effects).

  • It will never work (Score:1, Insightful)

    by silversoft (2716463) on Thursday August 30, 2012 @08:10PM (#41185357)
    Sadly, it will never work - for much the same reason that most all of Europe is in a recession there seems to be no end to. Europeans dont like to work or put in the long hours that it takes to make startups happen. Even worse, the governments have laws that prevent people from working late in most European countries! Added to which, most people want contracts and if you dont give them a contract you can get fined or go to jail... and most contracts put the companys owners on the line for back pay and 'built in pensions' and so on, so if your startup doesnt work then you cant file bankruptcy etc you end up having to pay every one off. Its the worst possible place to try and make a startup happen... the old school economics of Europe as a whole only support large companys.

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