E.g., 09/22/2014
E.g., 09/22/2014

The Human-Capital Needs of Tech City, London

Reports
August 2014

The Human-Capital Needs of Tech City, London

Cities are important sites of entrepreneurship and innovation, especially for the tech industry, and skilled migrants can play critical roles in economic development in high-tech clusters such as London's Tech City (also known as Silicon Roundabout). In the United Kingdom, an undersupply of skilled native-born developers encourages recruiters to look afield, but visa restrictions make hiring the right workers difficult. Evidence that firms are having trouble making the most of immigration point to a number of areas for policy action, as this report outlines. 

A raft of policies were introduced to grow the Tech City cluster, but while the United Kingdom is reforming policies to attract and retain skilled migrant workers and migrant entrepreneurs, getting the design of these programs right has proved especially difficult. Policymakers’ control over cluster development is limited: policies that seek to map clusters and maximize their growth rarely deliver expected benefits. However, policies that are not cluster specific—such as human-capital interventions aimed at improving the international supply of workers through migration or the local supply of workers through skills training—are likely to have indirect effects that help clusters grow. 

This report analyzes the importance of human capital to the development of Tech City and sets this discussion in a broader framework linking cities, digital sectors, and highly skilled immigration. 

The report is part of a series from MPI's Transatlantic Council on Migration focused on how policymakers at all levels can work together to help cities and regions get more out of immigration. The reports were commissioned for the Council's eleventh plenary meeting, "Cities and Regions: Reaping Migration's Local Dividends."

Table of Contents 

I. Introduction

II. The Development of Digital Clusters

A. Cities and Clusters Help Lower the Costs of Innovation

B. Even Digital Firms Like Face-to-Face Communication

C. The Role of Policy in Cluster Formation

III. The Case of Tech City

A. Tech City Basics

B. Tech City's Human-Capital Needs

IV. Policy Options

V. Conclusions and Recommendations