London is still the start-up capital of Europe – but its crown is at risk

TechHub, near London's "Silicon Roundabout". Image: Oli Scarff/Getty.

Silicon Valley often gets the lion’s share of attention when it comes to start-ups – and perhaps for good reason. But earlier this year, David Cameron launched a bid for its dominance, declaring that the UK should be “the startup nation of Europe”.

Startups’ low operating costs, lean management structures, and ability to pivot quickly mean they have the power to disrupt the business ecosystem and exert competitive pressure on prevailing companies. This, in turn, drives improvements in productivity and prosperity in the overall economy.

Digital businesses, in particular, are doing a fine job of disrupting whole industries and turning on its head our basic understanding of how we source goods and services. Just think of AirB&B and Uber.

Not all cities provide equally fertile ground for such startups, however. Nesta, as part of the European Digital Forum, set out to determine what it is that digital startups and scale-ups want from a city.

Working with digital entrepreneurs to determine what matters to them, we ranked 35 capital cities and known innovation hubs in the European Digital City Index. Combining multiple metrics – including digital infrastructure, culture and skills availability – we found London, with its plethora of “unicorns” such as Wonga, Zoopla and Shazam, to be top of the list.

The top 10 cities for digital entrepreneurs.

But why does place matter at all given the virtual nature of digital entrepreneurship?

Environmental conditions within cities still have a strong impact. For instance, local cultural attitudes towards entrepreneurship vary hugely and can influence the number of people who start new enterprises.

Physical connections between people are often highly significant in forging business relationships, and many venture capitalists prefer to invest in specific regions. Likewise, many digital firms still rely upon geographically-bound markets, if only to encourage initial network effects.

Contributing to London’s success is its access to capital, particularly its developed venture capital markets; a marked entrepreneurial culture, with a willingness to take on risk; and positive knowledge spill overs from multiple world-class universities such as Imperial, UCL, LSE and Kings.

But the Index also found that London is a victim of its own success.

Increasing costs – for labour, office space and day to day living expenses – give cause for concern. As any small business knows, cash is vital. So while London is a good place to acquire investment, the costs of living and working here also drain businesses of cash much more rapidly than elsewhere.

While these problems were not found to be enough to deprive The Big Smoke of its top place, policy-makers should not be complacent.

Extending small business rate relief to co-working spaces, incubators and accelerators may help somewhat, at least in the short term. However, high local taxes, a dearth of reasonably priced commercial buildings, migration pressures and an uncertain foreign worker programme all play a part in reducing the attractiveness of entrepreneurs looking to set up or relocate to London.

The city is also being challenged by the likes of Amsterdam. As explained in CITIE – a project which assessed the policy environment of 40 leading global cities – Amsterdam's size permits policymakers to experiment more with policies that will drive innovation and entrepreneurship. The Dutch capital has also been investing resources into its overall innovation strategy with projects like the Smart City initiative, where new products can be tested in a "living lab" and tweaks made according to real-word feedback.

Berlin, too, is a challenger to watch. In this year’s ranking it was marked down for its slow and costly digital infrastructure; in comparison with some cities in Eastern Europe, which have jumped straight to fibre from dial-up modems, the German capital is relatively sluggish. However, the city is making progress towards the German government’s goal of comprehensive 50 Mbit/s broadband by 2018, and this constraint is likely to be short-lived.

Paris, on the other hand, was expected to be a close contender, but was let down in our ranking mainly by its local market conditions: some digital goods and services here are growing at a surprisingly slow rate compared with the rest of Europe. This is a more difficult problem for city authorities to fix, but were this to be remedied, we believe that Paris could prove more attractive than London.

While London may be leading the pack, the capital cannot rest on its laurels if it wants to maintain its position. The Index provides food for thought for Europe’s competing cities and suggests ways policy makers can assist those trying to develop the local startup ecosystems – and helping Europe to perhaps, one day, trump its competition across the Atlantic.

Christopher Haley is head of startup and new technology research, and Siddharth Bannerjee digital startups researcher, at Nesta, the UK’s innovation foundation.


Urgently needed: Timely, more detailed standardized data on US evictions

Graffiti asking for rent forgiveness is seen on a wall on La Brea Ave amid the Covid-19 pandemic in Los Angeles, California. (Valerie Macon/AFP via Getty Images)

Last week the Eviction Lab, a team of eviction and housing policy researchers at Princeton University, released a new dashboard that provides timely, city-level US eviction data for use in monitoring eviction spikes and other trends as Covid restrictions ease. 

In 2018, Eviction Lab released the first national database of evictions in the US. The nationwide data are granular, going down to the level of a few city blocks in some places, but lagged by several years, so their use is more geared toward understanding the scope of the problem across the US, rather than making timely decisions to help city residents now. 

Eviction Lab’s new Eviction Tracking System, however, provides weekly updates on evictions by city and compares them to baseline data from past years. The researchers hope that the timeliness of this new data will allow for quicker action in the event that the US begins to see a wave of evictions once Covid eviction moratoriums are phased out.

But, due to a lack of standardization in eviction filings across the US, the Eviction Tracking System is currently available for only 11 cities, leaving many more places facing a high risk of eviction spikes out of the loop.

Each city included in the Eviction Tracking System shows rolling weekly and monthly eviction filing counts. A percent change is calculated by comparing current eviction filings to baseline eviction filings for a quick look at whether a city might be experiencing an uptick.

Timely US eviction data for a handful of cities is now available from the Eviction Lab. (Courtesy Eviction Lab)

The tracking system also provides a more detailed report on each city’s Covid eviction moratorium efforts and more granular geographic and demographic information on the city’s evictions.

Click to the above image to see a city-level eviction map, in this case for Pittsburgh. (Courtesy Eviction Lab)

As part of their Covid Resource, the Eviction Lab together with Columbia Law School professor Emily Benfer also compiled a scorecard for each US state that ranks Covid-related tenant protection measures. A total of 15 of the 50 US states plus Washington DC received a score of zero because those states provided little if any protections.

CityMetric talked with Peter Hepburn, an assistant professor at Rutgers who just finished a two-year postdoc at the Eviction Lab, and Jeff Reichman, principal at the data science research firm January Advisors, about the struggles involved in collecting and analysing eviction data across the US.

Perhaps the most notable hurdle both researchers addressed is that there’s no standardized reporting of evictions across jurisdictions. Most evictions are reported to county-level governments, however what “reporting” means differs among and even within each county. 

In Texas, evictions go through the Justice of the Peace Courts. In Virginia they’re processed by General District Courts. Judges in Milwaukee are sealing more eviction case documents that come through their courtroom. In Austin, Pittsburgh and Richmond, eviction addresses aren’t available online but ZIP codes are. In Denver you have to pay about $7 to access a single eviction filing. In Alabama*, it’s $10 per eviction filing. 

Once the filings are acquired, the next barrier is normalizing them. While some jurisdictions share reporting systems, many have different fields and formats. Some are digital, but many are images of text or handwritten documents that require optical character recognition programs and natural language processors in order to translate them into data. That, or the filings would have to be processed by hand. 

“There's not enough interns in the world to do that work,” says Hepburn.

Aggregating data from all of these sources and normalizing them requires knowledge of the nuances in each jurisdiction. “It would be nice if, for every region, we were looking for the exact same things,” says Reichman. “Instead, depending on the vendor that they use, and depending on how the data is made available, it's a puzzle for each one.”

In December of 2019, US Senators Michael Bennet of Colorado and Rob Portman of Ohio introduced a bill that would set up state and local grants aimed at reducing low-income evictions. Included in the bill is a measure to enhance data collection. Hepburn is hopeful that the bill could one day mean an easier job for those trying to analyse eviction data.

That said, Hepburn and Reichman caution against the public release of granular eviction data. 

“In a lot of cases, what this gets used for is for tenant screening services,” says Hepburn. “There are companies that go and collect these data and make them available to landlords to try to check and see if their potential tenants have been previously evicted, or even just filed against for eviction, without any sort of judgement.”

According to research by Eviction Lab principal Matthew Desmond and Tracey Shollenberger, who is now vice president of science at Harvard’s Center for Policing Equity, residents who have been evicted or even just filed against for eviction often have a much harder time finding equal-quality housing in the future. That coupled with evidence that evictions affect minority populations at disproportionate rates can lead to widening racial and economic gaps in neighborhoods.

While opening up raw data on evictions to the public would not be the best option, making timely, granular data available to researchers and government officials can improve the system’s ability to respond to potential eviction crises.

Data on current and historical evictions can help city officials spot trends in who is getting evicted and who is doing the evicting. It can help inform new housing policy and reform old housing policies that may put more vulnerable citizens at undue risk.

Hepburn says that the Eviction Lab is currently working, in part with the ACLU, on research that shows the extent to which Black renters are disproportionately affected by the eviction crisis.

More broadly, says Hepburn, better data can help provide some oversight for a system which is largely unregulated.

“It's the Wild West, right? There's no right to representation. Defendants have no right to counsel. They're on their own here,” says Hepburn. “I mean, this is people losing their homes, and they're being processed in bulk very quickly by the system that has very little oversight, and that we know very little about.”

A 2018 report by the Philadelphia Mayor’s Taskforce on Eviction Prevention and Response found that of Philadelphia’s 22,500 eviction cases in 2016, tenants had legal representation in only 9% of them.

Included in Hepburn’s eviction data wishlist is an additional ask, something that is rarely included in any of the filings that the Eviction Lab and January Advisors have been poring over for years. He wants to know the relationship between money owed and monthly rent.

“At the individual level, if you were found to owe $1,500, was that on an apartment that's $1,500 a month? Or was it an apartment that's $500 a month? Because that makes a big difference in the story you're telling about the nature of the crisis, right? If you're letting somebody get three months behind that's different than evicting them immediately once they fall behind,” Hepburn says.

Now that the Eviction Tracking System has been out for a week, Hepburn says one of the next steps is to start reaching out to state and local governments to see if they can garner interest in the project. While he’s not ready to name any names just yet, he says that they’re already involved in talks with some interested parties.

*Correction: This story initially misidentified a jurisdiction that charges $10 to access an eviction filing. It is the state of Alabama, not the city of Atlanta. Also, at the time of publication, Peter Hepburn was an assistant professor at Rutgers, not an associate professor.

Alexandra Kanik is a data reporter at CityMetric.