5 ms·
Cory Doctorow: How startups of Silicon Roundabout are gradually being flattened
- mysterywhiteboy 13y agoArticle was removed - but google is all-seeing: http://webcache.googleusercontent.com/search?q=cache:www.theguardian.com/cities/2014/mar/07/tech-firms-belong-old-street-hackney-council http://webcache.googleusercontent.com/search?q=cache:www.the...
- camillomiller 13y agoWell, I guess some editor's being grilled for letting this paragraph pass through. >Maybe not one as hot as Silicon Valley, but a least something to add much-needed diversity to the capital's industrial base – which presently consists largely of companies that launder war criminals' money, and companies that exchange this laundered money for empty luxury flats. While one can agree, Doctorow's sarcasm isn't clear and that sounds like a pretty unsubstantiated claim, even by the guardian's admirably liberal standards.
- mherdeg 13y agoThat sentence is still present in today's published version of this article, http://www.theguardian.com/cities/2014/mar/10/slow-death-of-silicon-roundabout http://www.theguardian.com/cities/2014/mar/10/slow-death-of-... .
- camillomiller 13y agoThat's a good thing. Still wondering why it was pulled, then
- mistakoala 13y agoInteresting. Why would The Graun bin the article?
- deleted 13y ago[deleted]
- pjc50 13y ago"This article has been removed as it was launched early. It will be reinstated at the correct launch time."
- oneeyedpigeon 13y agoWhere did you get that text from?
- pjc50 13y agoIt appeared when I clicked on the link. Maybe it's UK-only or something.
- oneeyedpigeon 13y agoWeird - I'm in the UK and just see a generic 404.
- oneeyedpigeon 13y agoAh - I'm looking at the beta of the new design, which is in every way far superior, except for this one :)
- Frqy3 13y agoI'm getting the same text from Australia.
- darkr 13y agolink to the post that links to the google cache: https://news.ycombinator.com/item?id=7359526 https://news.ycombinator.com/item?id=7359526
- mistakoala 13y agoI suppose it pays for me to read beyond the headline!
- gaius 13y agoGentrifiers complaining that they've been out-gentrified. There were people living in Hackney and Dalston before the hipsters moved in and starting pricing them out of the neighbourhoods they grew up in, but what goes around, comes around.
- gutnor 13y agoAlso, silicon roundabout is at 5 min walking distance of the heart of the city of London, so any kind of success would have priced them out. The council is doing what their own success would have been doing in a few years. It would have required tremendous effort by the government to maintain the right balance of cheap business place and accommodation required to let the community survive. 100 meters away from one of the world finance capital ( and only sector still working in the UK ) that's an impossible challenge. You cannot bootstrap a startup community too close to such location. You need some room for the community to create a culture and some momentum.
- gaius 13y agoWe have had a lot of Silicon-whatsits in the UK. Silicon Fen in Cambridgeshire and Silicon Glen somewhere in Scotland. There's a big electronics scene in Bristol. Tho' this is something that it's impossible for governments to do, really, all the money will be creamed off by "advisers" and "consultants", small companies given impossible bureaucratic hoops to jump through, etc. The best thing the government can do is just take a step back. Or my pet harebrained scheme: resurrect the original Acorn Archimedes and buy a million of then, requiring that all govt departments use indigenous British computing technology...
- pjc50 13y agoNothing in London is quite so profitable as property development. I suppose this is the continuation of the process of sweeping away the derelict bits of Hackney for the 2012 Olympics. It would be nice if economic activity wasn't quite so concentrated in unaffordable London. But I can feel the wave of money washing over the built environment even out here in Cambridge ("Silicon Fen"); it's just about commutable to North London, so buildings have been going up with the clear aim of selling to middle eastern or Chinese investors. It has its positive aspects - many of the cleared buildings were in terrible condition, ugly, or (as in Hackney) suffering from asbestos. But the new ones are still unaffordable. I'm fleeing to Edinburgh while watching professional couple friends get priced out of buying their first home. Property booms cannot go on forever: http://www.theguardian.com/world/2014/feb/28/home-ownership-greece-property-market http://www.theguardian.com/world/2014/feb/28/home-ownership-... but we lack the leadership to resist this or to try and distribute industries more evenly across the country. (Mediacity is a token attempt at building a media cluster in Manchester while kneecapping the BBC and looting its buildings).
- 7952 13y agoBritain does seem to be getting balkanised into areas where economic development is allowed and areas where it is not. The planning system compartmentalises everything so that marginal development is impossible. Places like Silicon Fen are great, but you also need the crappy industrial estate that have cheap rents and access to transport links.
- gaius 13y agoWhat is the value of a building? To me it seems obvious that a building is an asset and what you want from it is the income from the rents, and the value of it is the NPV of future rents. Anything else is bubbly.
- lifeisstillgood 13y agoAn excellent point, that is almost universally ignored. NPV of future rents is ignored almost totally in the domestic housing market, and it seems that commercial property is riven with debt fuelled purchases that need another purchase to work.
- kasbah 13y agoNice little bit of criticism of the Hackney council and I like the summary of the startup scene in general: A common pattern in startups is to go to work for one, watch it implode and team up with a colleague or two to move on to another startup; repeat several times until you have agglomerated a bunch of people you know, like and trust; then do your own startup with them. The statement that foreign students paying vast sums to study in UK is an "education bubble" is made kind off hand though and I would love to hear Cory expand on that idea. As far as I can tell this is on the rise and is central to most university budgets. What could happen to "burst" this supposed "bubble"?
- Xophmeister 13y agoInternational students pay full fees here, whereas UK/EU students are subsidised somewhat. I don't know if international student fees are "central" to university budgets, in comparison with domestic fees and funding, but they're obviously very important. Increasingly so, in recent years, as domestic fees have gone up considerably, which has seen a decrease in home student numbers. Anyway, the bubble would burst when the decreasing value of a UK (or any) degree is overtaken by the increasing cost of it. Bear in mind that the cost of a degree isn't just the tuition; the cost of living is substantial in the UK (particularly in London) and that's making the option of studying here less and less attractive.
- kasbah 13y agoYes, I should have said "integral to university budgets" rather than "central". The thing is, the perceived value of education is largely based around prestige. Unless the cost of studying in the UK suddenly sky-rockets or there is some scandal that damages the reputability of all UK universities there isn't going to be a "bust" scenario. It just doesn't seem very likely. I can envision a slow decline but no sudden fluctuations. Maybe I am mis-interpreting what "bubble" means?
- tehwalrus 13y agoWhen I started uni, the home/EU fees were £1000 a year[1]. My friends in class who were applying as international (non-EU) students had to pay £24k per year to attend the same courses. The Government did pay universities the "teaching grant" per home student, to top up the fees, but when tuition fees settled at £9k per year that number was chosen in order to eliminate most of the teaching grant[2], so assuming that universities were getting topped up to £9k per home student, foreign students were worth 2.5x the home ones. I know for sure that the universities compete to get as many foreign students in as possible, which was why all the fuss when they revoked London Met's ability to give student visas - they were attacking their funding, basically. [1] they have since tripled twice, although remember repayments are like a sort of tax (the government lends you the money in the first place, and you pay back 9% of your income above £15k). [2] I think science students still get it and arts students don't, or something, because this government is insane.
- stuaxo 13y agoRemoved article ?
- dabeeeenster 13y agoI've worked in the area since 2004. Although I agree with the points he is making, I don't really see the author coming up with any solutions. The problems are rooted in the right to private property. I'm also fairly certain that Hackney have an issue with corruption. The way to flip properties in the area is to buy up a building with a B1 use (office), then apply to planning permission to build a residential penthouse or two on the top of the building. Build the flats, sell them for an insane amount of money to a couple of bankers, job done. I've been told off the record by estate agents that certain people have "more luck" with these applications than others, but what can you do?
- deleted 13y ago[deleted]
- Bigkate 13y agomy best guess for where the roundabout people will move to is Deptford - if they can cope with moving to "sowth louwdon" - home of two separate hack-spaces spc.com and a new men-in-sheds being set up by the peabody trust http://menssheds.org.uk http://menssheds.org.uk and Goldsmiths college
- JonnieCache 13y agoThey're also throwing out all the communities who are living "unauthorized" in warehouses and commercial units. https://www.youtube.com/watch?v=SVL50gwSLlE https://www.youtube.com/watch?v=SVL50gwSLlE
- lifeisstillgood 13y agoOoops: This article has been removed as it was launched early. It will be reinstated at the correct launch time.
- RyanMcGreal 13y ago"This article has been removed as it was launched early. It will be reinstated at the correct launch time."
- blueskin_ 13y agoLooks like it's been memory-holed. http://webcache.googleusercontent.com/search?q=cache:www.theguardian.com/cities/2014/mar/07/tech-firms-belong-old-street-hackney-council http://webcache.googleusercontent.com/search?q=cache:www.the...
- w_t_payne 13y agoCome to Brighton instead! Brighton is to London what California is to NY. I.e. full of hippies and "creative" types.
- w_t_payne 13y agoOr the Medway Towns: Full of weird, strange people ... but still dirt cheap & commutable to/from London.
- onmydesk 13y agoThis is what is wrong with the UK. Bubble property prices all over the country. And relative to incomes it is ALL OVER the country. Everyone over 40 has a buy to let portfolio and those under 40 are stuck in rented property with few rights. Did you know in the uk if you rent you can be evicted for no reason at all? And if you will not or can not pay bubble prices for property you have to rent, live in poorly maintained housing and presumably never have children. This is happening NOW and it is a disgrace. Unbelievably it is being encouraged by the government with schemes to prop the bubble up further! But they are only a year away from an election now and its the older people renting out property who are most likely to vote and so the young just have to deal with it. Actual wealth creation that can come from government support of startup hubs is the furthest thing from this governments mind. We're all too busy getting rich from doing nothing all day in someone else's office and waiting for the young to pay off our multiple properties mortgages for us to actually do anything creative or beneficial. Im here and it makes me sick. This government by the way, which is manipulating the housing market in such an anti capitalist way, is actually the more capitalist party of the two.
- mpclark 13y ago> Everyone over 40 has a buy to let portfolio and those under 40 are stuck in rented property with few rights. Never seen it put so pithily, and yes, that's exactly how it feels.
- marvin 13y agoNorway is mostly the same these days. Maybe it's a Northern European phenomenon. Of course, there is an upside to this: By renting, you are not taking on the risk of a fall in real estate prices. But I'm not sure if the fewer rights make up for it. You can't be "evicted" for no reason over here, but to my understanding it is legal to have renting contracts with a 1-month notice to termination. So it's more or less the same situation.
- mpclark 13y agoI get the feeling that the government in the UK is managing the economy solely to make sure house prices do not fall as that would cause a national crisis at this point. Under any other circumstances they would surely have collapsed by now. The other problem is that the rental stock in the UK is managed almost exclusively by amateur landlords, which leads to petty restrictions (no pets, no smoking, no drilling, no decorating etc), attempts to sell houses out from under the occupier ("You don't mind if we show some people round every now and then, do you?" The hell I don't!) and hard-to-quantify risks (I know somebody with an older landlord who is now undergoing another round of treatment for cancer; putting the human tragedy aside, should they start looking for another place now, or can they wait a while?)
- mattgibson 13y agoThis is not some weird oddity due to council mismanagement, it's just the latest example of one of the greatest naturally occurring scams in history. The process that's occurring is Ricardo's law of rent: https://en.wikipedia.org/wiki/Law_of_Rent#The_Law_of_Rent https://en.wikipedia.org/wiki/Law_of_Rent#The_Law_of_Rent It's counter intuitive, but brilliant once you realise how it works. Put simply, when a company makes more money due to the location they're in, the landlord gets all of the extra profit, not the company that does the work. Every time the company's profits rise, the rent will go up by the same amount. Free money without working if you own land, and very bad for capitalism. In the case of Old Street, it used to be that there was little advantage to being there, so rents were cheap (not much competition). That attracted lots of startup types and now, the area confers a significant advantage due to the network of companies and people. The choice for a new startup is : a) Old Street, where recruitment costs (for example) will be lower, or b) Somewhere Rubbish, where you pay e.g. an extra 20k per year for recruitment. If the rents are the same, everyone will want Old street for the 20k advantage, so the landlords play them off against each other: the offices go to the highest bidder. Whilst the extra rent you pay to be there is less than 20k, it makes sense to pay it as you're still ahead, so people keep upping their bids until the rent reaches ($rent_for_rubbish_place + 20k). The landlord gets it all for doing nothing! It's a scam because it operates outside of free market capitalism: you can't manufacture more land at Old street roundabout (or move it there from elsewhere), so supply does not increase when the price rises. Not a free market. Also no jobs created by the price rises. The solution to the scam is land value tax (LVT), which would reclaim the unearned money from the landlords (whilst leaving them their fairly earned money from providing the buildings). LVT done right would make corporation tax unnecessary whilst causing no price rises and no job losses. A massive boost for the economy. Seriously. No hyperbole - it works counter intuitively due to the fact that its not a free market in the first place. Winston Churchill was strongly in favour of LVT and described land as 'the greatest of all monopolies'. He thought that taxing it was one of the most important political ideas of the century, so it warrants a bit of reading: http://www.landvaluetax.org/current-affairs-comment/winston-churchill-said-it-all-better-then-we-can.html http://www.landvaluetax.org/current-affairs-comment/winston-...
- spiralpolitik 13y agoThis is nothing new and its been like that since the early 80s when Thatcher sold off the council housing stock at rock bottom prices. An area of London gets popular, money moves in pushing prices up and people out. City government does nothing. Rinse and repeat. All this has happened before, all this will happen again. At the end of the 90s it was Notting Hill, now its Shoreditch, Spitalfields and Whitechapel with the gentrification wave pushing itself out east with Bethnal Green next in line. Ultimately this will be the demise of the UK economy as all the money and jobs will focus on the southeast leaving the rest to fend for themselves.