November 5th, 2010
03:05 PM GMT
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London, England (CNN) - British Prime Minister David Cameron has spelled out an ambitious plan to support fledging tech companies in order to create a tech cluster called The East London Tech City. He was speaking before a very enthusiastic crowd of young entrepreneurs and older and wiser venture capitalists and bankers.

It seemed to me that the government is serious about making changes to the law and investing money in this venture. But even the PM freely admitted that Britain can't create a Silicon Valley at the moment.

From copyright laws to patent protection to the lack of risk taking in the culture, the country isn't a place where brilliant minds can take ideas to market, fail and then take another idea to market and fail again and then really take off.

As one young entrepreneur said to me, anyone who succeeds here is considered lucky or just privileged or in the end, is resented.

The changes outlined are encouraging. The PM wants to change the visa laws to allows those with an idea and funding to get one with little hasssle. The government will also look to change the data protection and patent laws to conform to the internet age. And, most importantly, the goverment wants to streamline the process for up starts to get funding and has pledged to allow smaller companies a better shot at procurement contracts from the country's biggest spender - the government itself.

One rainmaker asked the government to make it easier for a two-man shop to fire someone if things go wrong. No word on any change to employment laws though.

The plan is for one of the huge media buildings under construction in the Olympic Village to be turned into a tech and media hub after 2012. That will be linked to the East London area known as Shoreditch where more than 100 start ups are currently based. The roundabout there on Old Street is now called "Silicon Roundabout."

The hope is that the start-ups will stay in the area, instead of leaving shabby East London to posher parts of London and California if they actually take off.

And though the government wants to create a small rival to Silicon Valley, many of the valley's darlings are backing the effort. Google, Facebook, Intel and Cisco have pledged to offer expertise to the small companies that stick to the Shoreditch cluster – giving them access to intellectual property and patent experts, to web gurus and to those who can fix a problem for a two man team that would cost to much for them to fix otherwise.

Still, can it work? Can London keep these young people in London with enough funding and advise. Can it keep them from losing out to start-ups in India or Silicon Valley?

Check out bookingbug.com and socialgo.com for two firms who are desperate to grow in East London and have welcomed the help of the government.

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soundoff (12 Responses)
  1. Ashwin Shinde

    Excellent article. Highlights government's drive as well as the problems associated with leading the country out of the financial mess. Hope the government succeeds.

    November 6, 2010 at 8:56 pm |
  2. sergio

    well done for u guys, im starting to likr Mr Cameron, pro business is pro development....

    November 8, 2010 at 2:38 pm |
  3. Fred Osazele

    I think he need to first all help buy back all the British auto companies that are currently in the hands of foreign countries like Germany and India and the Arabians...I don't see how a country like England would sold out all their manufacturing companies leaving the country drained and poor..We saw how the French government refused to allow Siemens of Germany to take the then ailing Alston,the company that build High speed train.Even the the London airport is being manage by a Spanish firm.When China started upon to the world for investment,Germany went there with not less than 300 companies from construction to high tech and French a quarter of that,but what the British offered was not heard.....i think is about time for the British Economy to return back to basic and not depending on those Gold reserve foreign investment that really never help....

    November 11, 2010 at 10:49 pm |
  4. adi farid b.asmaon

    i beg to differ to the commentary frm fred osazele tht his nation shold not depend on those gold reserve foreign invstment coz to do just that of creating small silicon valley near east london they need to depend on it n in fact they r having austerity measures rite now so dont be plain stupid!

    November 14, 2010 at 10:10 am |
  5. Daniel Kirk

    I know I am being pedantic, but the grammar mistakes in here are not typical of a world-class journalist. The last use of the phrase 'start-ups' (found in the antepenultimate paragraph) is hyphenated, however, in the previously paragraph it is not. Should not the final paragraph be written '...enough funding and advice', instead of the verb form '...funding and advise.' Also, in the penultimate paragraph, it reads '...it would cost to much...', should not this 'to' be substituted with the adverb 'too'? I know we all make mistakes, and I presume that this was written with time restraints and under pressure:)

    November 16, 2010 at 3:37 pm |
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