Culture | Books

Time to wake up and smell the high-tech coffee

A very good book for anyone interested in the condition of London and what the future may bring, says Chris Blackhurst
Star tech: “Silicon Roundabout” aka Old Street roundabout (Picture: Chris Ratcliffe/Getty)
Chris Ratcliffe/Getty Images
Chris Blackhurst
5 March 2015

The Flat White Economy by Douglas McWilliams (Duckworth, £16.99)

It's hard to know whether to laugh or cry at the timing of publication of Douglas McWilliams’s The Flat White Economy. At the weekend McWilliams, an adviser to George Osborne and head of the Centre for Economic and Business Research, was outed smoking crack cocaine. He’s now taking a sabbatical to sort out his personal issues.

Presumably, the adage that all publicity is good publicity will kick in and the book will sell better than expected. On the other hand, amid the furore, its actual contents are likely to be forgotten. And that will be a pity, because The Flat White Economy is a very good book indeed for anyone interested in the condition of London and what the future may bring. It benefits hugely from McWilliams not writing as a typical economist. There’s a personal, self-deprecating tone, and at times the book takes on the mantle of confessional as he reports on the changes he’s witnessed.

For several years I worked at Silicon Roundabout. Except it did not have that super-smart name then. Instead, it was Old Street roundabout. To say it was dismal was an understatement. Architecturally horrible, it lies betwixt the City and Islington, an adjunct to smartness but nowhere in terms of facilities or élan.

People hurried to the station in the middle, traffic crawled around the perimeter. There were a few bars but generally this was a wasteland.

Now, two decades on, and the once dreary place is transformed. Remarkably, it’s become the epicentre for Britain’s technological revolution, one of the key drivers in our economic recovery and future progress. The truth is, Old Street still is nothing to look at, it remains a concrete eyesore, but it’s the businesses that have sprung up around it that matter.

McWillams is transfixed, so much so that he can seem wide-eyed. “Compared with other Londoners [the techies at Silicon Roundabout] economise massively on property costs and by living out of a suitcase. Their minor extravagances tend to be high-tech IT kit — the latest phone, tablet or laptop and, of course, the latest apps.” And, get this, “Many cycle to work wearing high-tech cycling gear.”

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McWilliams could be describing pretty much a swathe of the entire young working and student population of London, not just one corner of EC1. But based at that postcode address since 2000, he’s observed at first-hand the influx of this new breed of worker.

There’s an air of innocence, too, to his discovery that passenger numbers at Old Street rose by more than double-digit percentage growth in 2012. His office was based in the middle of the zone but he does not appear to have noticed — presumably his head was down, buried in statistics and charts.

When he does take a closer look, he discovers the newcomers “seemed to work in a range of occupations: from advanced techie geeks and marketing people to creative types”.

What united them apart from their relative youth and informality, and love of technology, was coffee. One of his colleagues at CEBR, Rob Harbron, observed they preferred one type of coffee — the flat white — and the name for the new economy was born.

Putting aside McWilliams’s personal, sometimes open-mouthed delivery — actually refreshing coming from an economist — there’s no doubting the economic, social and cultural importance of what he describes. In two years, 32,000 businesses have been registered in that single postal district; the Flat White Economy accounted for 7.6 per cent of GDP In 2012 , which is due to rise to 15.8 per cent in 2025.

The UK leads the world in online spending — 13.5 per cent of all purchases in the UK in 2013 versus 11.5 per cent in the US and an average for Europe of 7.2 per cent. That growth has been matched by a surge in digital advertising.

Those two factors, plus a third, immigration, lie behind the rise of Silicon Roundabout. McWilliams makes a compelling case for allowing in foreigners, especially young, educated, tech-savvy ones. Their desire to settle in the UK, and mainly in London, where they’re drawn to the increasingly hip area on the cusp of cheaper accommodation to the east and north of London is, he argues, responsible more than anything for the success of Old Street and its Shoreditch close neighbour.

While it’s easy to get bowled over by that shift, some context is surely required. There are other areas of Britain that are using the Silicon prefix. For all its transformation, too, Silicon Roundabout has yet to produce a true global tech giant. If a Google or Facebook emerges in Britain it’s just as likely to hail from one of those other Silicons or university science parks or even, simply, from someone’s bedroom or garage.

As for those 32,000, how many of them will sustain and go on to provide lasting jobs and prosperity?

That, though, is to quibble. America may have Silicon Valley but we’ve not been slow in advancing either. Something spectacular has occurred where City Road meets Great Eastern Street, and we should be thankful.

Go to eveningstandard.ca/booksdirect to buy this book for £14.99, or phone 0843 060 0029, free UK p&p