Why business clusters are an increasingly urban affair

Silicon Valley: the cluster effect in action. Image: Getty.

Below a kebab shop in Shoreditch, at the end of a corridor covered with old Czech newspapers, an appointment-only establishment serves cocktails with a theatrical twist. Holy Smoke is essentially cognac, but comes hidden in a bible accompanied by smouldering frankincense and myrrh; Old Castro is rum poured over dissolving candy floss. Reviews of Lounge Bohemia on social media range from hip to hype.

Sustained by the well-paid workers of the East London tech scene, such bars are increasingly en vogue. They might not seem like an obvious magnet for productivity, yet some firms have located in or re-located to the area to recruit or retain the talented people who drink in them. A technology hub has emerged, which the government has branded “Tech City”.

The attraction of city living for the workers of the digital economy helps explain a shift in the innovation landscape. Rather than building on green-field sites, as the Silicon Valley pioneers did in the 1940s, a rising number of high-growth companies are choosing to locate and congregate in the core of cities, which offer advantages such as access to skilled labour and knowledge sharing.

“We are seeing the biggest rural urban migration in history,” said Peter Madden, chief executive of the Future Cities Catapult, a government-funded program to stimulate innovation. “Fashions have ebbed and flowed, but the last 150 years has been very urban.”

Competition for talent pits cities against each other: from Berlin, New York and Paris, to Beijing, Tel Aviv and even new upstart tech scenes such as Beirut. Investment brochures boast about a creative scene with art galleries, bars, restaurants and temporary “pop-up” installations. Eased visa restrictions, investment programs and direct incentives complete the offer.

This has led to a revived interest in business clusters – geographic concentrations of interlinked businesses – as a means of attracting mobile investment to stimulate growth. But building expensive out-of-town facilities would be unsuitable for footloose digital economy firms, many of whom require little more than a good internet connection. The new tools of economic development are downtown co-working spaces, and start-up incubators and accelerator programs.

Research by the Centre for Cities think tank and McKinsey, a consultancy, identifies 31 “economically significant clusters” in the UK: from financial services in London to Scottish whisky. Accounting for 8 percent of UK business but 20 percent of output, they are a “major contributor to growth”, and offer high salaries.

Centre for Cities Analyst Edward Clarke says it’s not possible to classify all of the 31 clusters as either urban or rural: many, such as Motorsports Valley in the Midlands, straddle large areas which include both. But he insists the most productive clusters “benefit from the fact that they are in cities”.

While fast-growing digital economy firms hog media attention, however, research-oriented firms in other industries – bioscience, for example, or motorsports – still require access to purpose-built facilities. “It depends where the focal point or the node is,” says Nigel Walker, head of access to finance at the Innovate UK agency. “Shoreditch is a village with artistic flair, and that wouldn’t work on a campus. But something that needs access to experimentation facilities, then maybe a campus is necessary.”

Governments continue to invest in them, from Russia’s Skolkovo Innovation Centre on the outskirts of Moscow to the Paris-Saclay research facility. Successful sites bring researchers, or people with ideas, together with entrepreneurs to turn those ideas into businesses, and access to finance. They also have good connection links to other centres.

In 2011, the government awarded the British Bioscience Research Council £44m to invest in its Babraham Research Campus, on the outskirts of Cambridge. Dr Celia Caulcott, its executive director for innovation & skills, explains that the campus is designed to attract small bioscience companies through access to world-leading researchers and facilities.

“It’s about proximity to discovery,” she explained, during the Innovate UK conference in London earlier this month. “We have invested to make sure that great research facilities are available to small companies that couldn’t possibly afford access to those things on their own.”

The flexibility of accommodation on the site appears to have given it the “stickiness” that economists crave. Will Spooner, chief science officer at Eagle Genomics, says the company has occupied seven different offices in six years on the campus as it expanded from 3 to 22 people: as the company grew, the space it occupied could grow with it, without the upheaval of moving to a completely new site.

Innovation, of course, doesn’t stop at city borders. Two “growth areas of national importance” attached to London – the Thames Gateway and the London-Stansted- Cambridge- Peterborough areas – extend far beyond the M25. Both schemes bring together policy makers across institutional boundaries, in an attempt to create joined-up thinking on issues such as transport, housing, and skills.

Public policy “should not only be one answer centric,” says Michael Joroff, a senior lecturer at the MIT Dept. of Urban Studies and Planning. Or, to put it another way: “A lot of growth will happen where growth happens.”

 

 
 
 
 

The Thessaloniki dig problem: How can Greece build anything when it’s swarming with archaeologists?

Archaeological finds on display in an Athens metro station. Image: Gary Hartley.

It’s fair to say that the ancient isn’t much of a novelty in Greece. Almost every building site quickly becomes an archaeological site – it’s hard to spin a tight 360 in Athens without a reminder of ancient civilisation, even where the city is at its ugliest.

The country’s modern cities, recent interlopers above the topsoil, serve as fascinating grounds for debates that are not just about protecting the ancient, but what exactly to do with it once it’s been protected.

The matter-of-fact presentation that comes with the many, many discoveries illustrates the point. Athens often opts to display things more or less where they were found, making metro stations a network of museums that would probably take pride of place in most other capitals. If you’re into the casual presentation of the evocative, it doesn’t get much better than the toy dog on wheels in Acropolis station.

That’s not even close to the extent of what’s available to cast an eye over as you go about your day. There are ruins just inside the city centre’s flagship Zara store, visible through the glass floor and fringed by clothes racks; Roman baths next to a park cafe; an ancient road and cemetery in an under-used square near Omonia, the city’s down-at-heel centre point.

Ruins in Zara. Image: Gary Hartley.

There is undoubtedly something special about stumbling upon the beauty of the Ancients more or less where it’s always been, rather than over-curated and corralled into purpose-built spaces, beside postcards for sale. Not that there isn’t plenty of that approach too – but Greece offers such sheer abundance that you’ll always get at least part of the history of the people, offered up for the people, with no charge attached.

While the archaic and the modern can sit side by side with grace and charm, economic pressures are raising an altogether more gritty side to the balancing act. The hard press of international lenders for the commercialisation and privatisation of Greek assets is perhaps the combustible issue of the moment – but archaeology is proving something of a brake on the speed of the great sell-off.

The latest case in point is the development of Elliniko – a site where the city’s decrepit former airport and a good portion of the 2004 Olympic Games complex sits, along the coastal stretch dubbed the Athens Riviera. With support from China and Abu Dhabi, luxury hotels and apartments, malls and a wholesale re-landscaping of several square kilometres of coastline are planned.

By all accounts the bulldozers are ready to roll, but when a whole city’s hovering above its classical roots, getting an international, multi-faceted construction job off the ground promises to be tricky – even when it’s worth €8bn.


And so it’s proved. After much political push and shove over the last few weeks, 30 hectares of the 620-hectare plot have now been declared of historical interest by the country’s Central Archaeological Council. This probably means the development will continue, but only after considerable delays, and under the watchful eye of archaeologists.

It would be too easy to create a magical-realist fantasy of the Ancient Greeks counterpunching against the attacks of unrestrained capital. The truth is, even infrastructure projects funded with domestic public money run into the scowling spirits of history.

Thessaloniki’s Metro system, due for completion next year, has proved to be a series of profound accidental excavations – or, in the immortal words of the boss of Attiko Metro A.E., the company in charge of the project, “problems of the past”.

The most wonderful such ‘problem’ to be revealed is the Decumanus Maximus, the main avenue of the Byzantine city – complete with only the world’s second example of a square paved with marble. Add to that hundreds of thousands of artefacts, including incredibly well-preserved jewellery, and you’ve a hell of a haul.

Once again, the solution that everyone has finally agreed on is to emulate the Athens approach – making museums of the new metro stations. (Things have moved on from early suggestions that finds should be removed and stored at an ex-army camp miles from where they were unearthed.)

There are other problems. Government departments have laid off many of their experts, and the number of archaeologists employed at sites of interest has been minimised. Non-profit organisations have had their own financial struggles. All of this has aroused international as well as local concern, a case in point being the U.S. government’s renewal of Memorandums of Understanding with the Greek state in recent years over protection of “cultural property”.

But cuts in Greece are hardly a new thing: lack of government funding has become almost accepted across society. And when an obvious target for ire recedes, the public often needs to find a new one.

Roman baths in Athens. Image: Gary Hartley.

Archaeologists are increasingly finding themselves to be that target – and in the midst of high-stakes projects, it’s extremely hard to win an argument. If they rush an excavation to allow the quickest possible completion, they’re seen as reckless. If they need more time, they’re blamed for holding up progress. 

Another widely-told but possibly-apocryphal tale illustrates this current problem. During the construction of the Athens Metro, a construction worker was so frustrated by the perceived dawdling of archaeologists that he bought a cheap imitation amphora in a gift shop, smashed it up and scattered the fragments on site. The worthless pieces were painstakingly removed and analysed.

True or not, does this tale really prove any point about archaeologists? Not really. They’re generally a pragmatic bunch, simply wanting to keep relics intact and not get too embroiled in messy public debates.

It also doesn’t truly reflect mainstream attitudes to cultural capital. By and large, it’s highly valued for its own sake here. And while discoveries and delays may be ripe for satire, having history’s hoard on your doorstep offers inconveniences worth enduring. It’s also recognised that, since tourists are not just here for the blue skies, good food and beaches, it’s an important money-maker.

Nonetheless, glass malls and shiny towers with coastal views rising from public land are good for the purse, too – and the gains are more immediate. As the Greek state continues its relentless quest for inward investment, tensions are all but guaranteed in the coming years. 

This is a country that has seen so many epic battles in its time it has become a thing of cliché and oiled-up Hollywood depiction. But the latest struggle, between rapacious modernity and the buried past, could well be the most telling yet. 

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