How London became the rest of the world’s startup capital
economist.com226 points by ellieh 7 days ago
226 points by ellieh 7 days ago
https://archive.ph/ebA1T
I cant speak to all this, but as an American doing a lot of work in London, wow transportation is incredibly great. Shockingly impressive. Traveling to London, and getting around London, and doing a lot of meetings in a small trip, is easier than anywhere in the US now because of how beautifully their transit system works (despite occasional delays which can be expected.) The rollout of the Elizabeth Line from Heathrow airport is also eye-opening. In NYC we speak about new subways lines with hundred-year plans (recall the 2nd ave subway extension) but in London the smoothly operating Elizabeth Line seemed to be introduced out of thin air. The Elizabeth Line, formerly known as Crossrail, is a lot more similar to the hundred year plan: https://en.wikipedia.org/wiki/Crossrail My dad was a tunnels engineer and worked on Crossrail feasibility studies at several points in his career across decades. London is is many ways one of the less impressive subway systems simply because much of it is so old, with small trains running in Victorian era tunnels. Not as bad as the Glasgow one, which feels like travelling on a 2/3 scale model of a subway with alarmingly narrow platforms. It is however a point of contention within the UK that London public transport is better than public transport in almost every other city, due to being properly nationalized. > Not as bad as the Glasgow one, which feels like travelling on a 2/3 scale model of a subway with alarmingly narrow platforms. For anyone who's not aware, the Glasgow Subway is literally smaller - the track gauge is 4ft (85% of standard gauge), and the rolling stock (trains) is similarly scaled down, to the point that you probably have to duck if you're over 6ft. Budapest subway is something similar, too. The oldest line which was inaugurated in the late 19th century, yes. (Though IIRC it is standard gauge.) The three modern lines are spacious and high-capacity. Very true. If you really want to see rail lines materialise out of thin air, go to any major cities in China. To americans, London public transport feels amazing. To rest of Europe, its lets say OKish I've lived in and visted many other cities in Europe. Public transport is often much cheaper than London, but there's few examples where I'd really say it was /better/. Can you think of an example? Oslo and Madrid come to mind. For the worst than london, The Rome underground is so sparse, it not really usefull. Paris is dense, chaotic and overcrowded. Ok, Oslo would be a small city in the UK - London has 12x the population. Madrid is closer. Paris is great - the ride is very smooth. Every single time I've been in Madrid the metro has been on strike. Every time. They run about 50-60% of services which means everything is slow and packed. I would actually say it's one of the worst in europe in my (I guess limited) experience due to that. I will have to try Oslo! Anywhere in Germany? E.g. Frankfurt has much higher density of subway lines and trams. Frankfurt is less than a tenth the size, I'm not sure it's really a comparison. I found Berlin to be no better/slightly worse. Of course the transport is good in most DE cities but seriously, Frankfurt is a village compared to London. London's network is both vast and dense. To people who have to commute to London, particularly if it's not a mainline train, it's tragically bad and overpriced. Train outages happen on a daily basis, the fare is very expensive compared to mainland Europe and the quality is quite a bit worse. True, but it's not london public transport (e.g not TFL) and that may actually be the only reason it's bad. Look what happened when TFL took over national rail services inside london (silverlink > overground). It's a pretty extensive system and the pretty new Elizabeth Line is great. But if you take something like the Piccadilly Line in from the airport, you probably shouldn't have a lot of luggage because a lot of stations just have stairs and platforms are often at a significant offset from the underground cars. (The double decker busses also work pretty well although they're not generally my default.) The Piccadilly Line was opened in 1906 for gods sake, forgive them for not catering to people with 3 suitcases very well! That's part of the reason we built the Elizabeth Line, to enable a better transport option for people coming into heathrow. It is interesting how infrastructure silently reflects society of its time. In 1906, people travelling with three suitcases would likely have servants carrying them, and no one cared particularly about comfort of servants. I'm not sure they'd of gotten the tube at all, unless perhaps to connect to a mainline station for a trip to the country? I still feel it more likely they'd of been driven, either by horse drawn or maybe even car (at least to the station) even in 1906. Other way round is my understanding. Road based transport was for the poor, especially trams, and the underground was for the fancy folk looking to shortcut past all of that. I remember some rather old photos with very well-dressed people waiting for the tube... so probably "it depends". Compared to horse-drawn carriages, the tube was fast and not prone to traffic jams. Most people of that era were "very well-dressed" relative to their wealth compared to today's "pyjamas and slippers to go to the local shop" level of couture, so I'm not to sure how much you can read into that. relative to their wealth But total wealth was a lot lower than today, while clothes were much more expensive relative to the average income than today. Many people wore their best clothes on Sundays only, and street photos from the same period show that an average person was dressed rather simply. I don't even think that the tube was affordable to average working class public. When I read historic accounts from much later (the 1930s), they mention that fare on public transport was expensive enough that you had to choose between a breakfast and a ride. > a lot of stations just have stairs Very few, if any. They may not have escalators (Covent garden, for eg., but no-one in their right mind uses that - just use Leicester Square and walk on the street) but there are almost always ways of getting up to the street, and assistance is signposted for people with problems. > platforms are often at a significant offset from the underground cars Not sure what you mean here - mind the gap? Typically less on the Piccadilly than some other lines - Bank on the Central is particularly scary. Based on living 30-odd years in London, most of it using the Piccadilly line on my daily commute and to get to LHR. Sounding like a TfL groupie here, but it is a pretty good transit system, given geographic and budgetary constraints. It's not just the gap. The platform can also be a somewhat significant step up from the car. Normally not a big deal but a couple years back I had both real dress clothing and clothes for a long walk in my luggage on a fairly long trip overall. Agree that the Underground is good in general. I've used it a lot. That particular trip was just a case of having heavier luggage than I usually carry and I should have handled things differently. I'll be visiting Glasgow in May, and very much hope I'll have a chance to visit the miniature subway. Third ever built, first to be called a "subway", never expanded since it opened in 1896 - how can you not love a system like that? Thin air? It was delivered 3 years late and cost £5bn more than it should have. While projects like HS2 to the North are scaled back. The UK uses other parts of the county as a piggy bank to fund London projects. I have a dog in this fight as I'm quite close to the public transport industry in the North and it's pretty disheartening to see politicans use us as some sort of "policy win" and then never follow through with it. Manchester only recently got devolved powers meaning the region did not have to get approval from Westminster on how they use their money and the bus and tram system has completely improved in the sapce of a couple of years (unified tickets, tap and go) with the suburban rail to come into that this year. What is also interesting is that London's productivity growth is falling compared to Manchester, Leeds and Liverpool. So those cities that aren't getting the fancy new train lines are actually performing better. > The UK uses other parts of the county as a piggy bank to fund London projects. it's the exact opposite Although Yes CrossRail was partly funded by a levy on London homes and businesses, London get's more funding per capita for public transport than anywhere else in the country Imagine what we achieve if we invested London levels of money in transport across the rest of the country London pays more taxes per capita than the rest of country. And decisions made in London have drained those other cities of investment and tax revenue. Imagine if the money spent on transport in London wasn't funding things like fake jobs to carry people to massive pensions because TFL employees can't be made redundant. This is demonstrably false. The data shows the exact opposite. Transport spending in London was £1,313 per capita in 2023/24, compared with just £368 per head in the East Midlands[0] - nearly 4x the investment. Over the decade to 2022/23, if the North had received the same per person transport spending as London, it would have received £140 billion more[1]. The East Midlands got just £355 per person, the lowest of every nation and region[1]. Yes, London generates a fiscal surplus, but that's a self-fulfilling prophecy. London receives the highest investment spending for both economic and non-economic areas, relative to population size[2]. In 2022, infrastructure construction spend in London was £8.8 billion, whilst Scotland came second with £3.6 billion[3]. It's circular logic: * invest heavily in London -> infrastructure drives productivity -> higher productivity generates more tax revenue -> claim London 'subsidises' other regions -> use this to justify more London investment. Infrastructure investment enhances productive potential[4], but all other regions are systematically denied it. London has returns on investment because it's the only place that actually gets proper investment. You can't starve regions of infrastructure for decades, watch their productivity stagnate, then point to London's tax surplus as proof they are subsidising others, that's fucking stupid. --- [0] https://www.statista.com/statistics/1134495/transport-spendi... [1] https://www.ippr.org/media-office/ippr-north-and-ippr-reveal... [2] https://commonslibrary.parliament.uk/research-briefings/sn06... [3] https://www.ons.gov.uk/economy/economicoutputandproductivity... [4] https://www.bennettschool.cam.ac.uk/blog/what-role-infrastru... You're describing economies of scale — they inevitably happen. London has high returns not only because of investment but also because it's a huge city and big cities generate good returns. If you built the Elizabeth line in the middle of nowhere, you wouldn't get a return. The return is enabled by the fact it's a big city. Elizabeth line will pay for itself very very quickly. It's entirely possible that investment in say a tram network in the east midlands will never pay for itself. Left with business cases like that it's not really a shock what the goverment choses. I agree it's unfair and self fulfilling, but this is what life is like, success breeds success and failure, well. I think north of 62% of elizibeth line spending was spent with companies outside the M25, for example building the trains kept a chunk of Derby in work when the factory would have otherwise closed (more than once!) https://www.bbc.co.uk/news/articles/cew407745jko > This is demonstrably false. The data shows the exact opposite. it is not > Yes, London generates a fiscal surplus thank you the only regions of the UK that generate a net return to the treasury are London, the South East and East of England (the East of England certainly has reasons to be upset, they have naff all infrastructure AND are a net payer) > You can't starve regions of infrastructure for decades, watch their productivity stagnate, then point to London's tax surplus as proof the system works, that's fucking stupid. fortunately I didn't claim that please put the strawman down You're confusing cause and effect. London's surplus exists because the entire country funded its infrastructure for decades. You've just admitted London got massively more investment - then you point at the returns from that investment as proof London subsidises everyone else. That's absurd. Where did the £140 billion extra that London received come from? National taxation. Including taxes from the regions that got a fraction of the spending. They funded your infrastructure, then you claim the resulting productivity is you being generous. You're not subsidising the UK. You're taking credit for returns on investment the entire country paid for, but only London received. That's not generosity, that's just spending other people's money on yourself then acting smug about the results. The 'net return to the treasury' you're celebrating was built with everyone's taxes concentrated in one place. London isn't the benefactor, it's the beneficiary masquerading as an altruistic donor. > You're confusing cause and effect. you are arguing against a point I never made (and no, I don't live in London, I live in an underfunded region too) > What is also interesting is that London's productivity growth is falling compared to Manchester, Leeds and Liverpool. So those cities that aren't getting the fancy new train lines are actually performing better. What data is this based on? It's based on the Centre for Cities report: "How productive are the UK's big cities?" which mentions Liverpool's, Leed's and Manchester's productivity growth and The State of London Report 2025 which reports London's productivity decline https://www.centreforcities.org/publication/how-productive-a... https://data.london.gov.uk/blog/the-state-of-london-report-2... 3 years late is practically early in UK infrastructure! HS2 was originally due to open in December! We're a decade off at least. I feel that's more "US public transport being bad" Right as an American this reads like "American who's never been to large Asian cities like Tokyo, Seoul, Beijing etc.. I'm with you. Tokyo is incredible. It's the only large city I've ever been to where I left thinking, "I'd love to live there." Transportation in Japan is a whole other level compared to my experiences in Germany and Austria. I've never been to England, though, so can't make that comparison. London and Berlin felt pretty comparable to me, with the airport situation better in London but the biking situation better in Berlin (marginally). Tokyo is just on another level entirely. > American who's never been to large Asian cities like Tokyo, Seoul, Beijing 30% of all Americans have never left the North Western hemisphere. I think the fundamental issue here is that many in America don't actually want dense cities, public transit, and more generally shared spaces. I, for one, would not want to live in condo when I can live in a house. When enough people want this, you end up with "urban sprawl" and one or more cars per house. It doesn't matter what most Americans want, because most urban land is zoned in such a way that single-family houses are all that is legal to build. The extremely high prices of housing units in central urban areas suggest that demand for dense cities, public transit, and shared spaces greatly exceeds the artificially-restricted supply. Here in Seattle, you can basically see the zoning boundaries as you drive around the city, because development always goes right up to the edge, as hard as it can. Without the arbitrary limits imposed by the zoning code, there would be a whole lot more condos built (and lived in!), and those edges would be a lot softer, shaped by ebbs and flows of market demand rather than the sharp lines of law. Genuinely dense cities basically don't exist in the U.S. The average "dense" city downtown in a U.S. city is broadly comparable to the worst car-dependent suburban or exurbian hellscapes of Europe and East Asia, and things only go worse from there. City downtowns near the East Coast are an exception since they were built in colonial times or thereabouts, so when you think "dense" you should really think of e.g. the densest boroughs in NYC. Yes and that reflects historical and cultural factors. Cities in Europe were largely built in the preindustrial era. In the U.S. there is just so much more space; it does not make sense to build small or dense. Transportation habits just reflect this. You make it sound like the construction of US cities were not at all lobbied by the auto industry back in the day and that urban sprawl was exclusively people's choice. A big problem in America is the entrenchment that is happening. People are becoming so polarised there is no common ground left for discussions and people aren't open to new ideas or thinking. I genuinely feel I can't even discuss this with many Americans. They stalwartly believe car culture is superior in every single aspect, any deviation from this narrative is simply met with 'you don't understand'. I recall in Ireland they asked an American on public TV what he thought of one of the few pedestrians only streets in Dublin (Liffey Street). He pointed out that he would be sorry for the loss of the trade on that street for the business involved compared to if cars were allowed to drive on it. It's then pointed out they make way more money since the transition as it's a city centre location with enormous footfall. He just counters that's not possible and cited some example in the US. There was a big argument on my local (American) Nextdoor recently because someone encountered a line of cars on a road that had recently had a bike lane added to it. People were outraged about bike lanes. And not just in the sense that they had to pay (via taxes) for something they didn't feel was useful. The fact that the lane even existed was an affront. They seemed to actually believe that the bike lane caused delays for cars merely by existing. How dare you get in the way of my fat ass in my fat-ass SUV. Almost spill my capuccino that I bought at the drive-thru because I couldn't get my fat ass off the car. As I understand it the US car lobby had a big hand in designing modern America, in such a way that for most cities it really isn't possible to use anything else. On the other hand a lot of European cities were laid out in the time of horse and cart. A lot of European cities still have Roman centres. Indeed - and some are even older. I believe romans still had horse and cart. Yeah, I'm aware they didn't have self-driving cars yet, lol. I was just being more specific about the timeline. I think it is widely known that public transport in the US is god awful. Public transportation is lovely in most European countries, IMO. It isn’t universally awful in the US. Washington, DC’s system is great and should be the cornerstone of any revitalization that isn’t so reliant on the federal government. I wouldnt call dc's metro "great", maybe relative to other cities, it is, but globally it's subpar. Often late, dirty, limited reach etc DC's system is OK. It suffers from being both a commuter rail system and a city transit system mashed together. It needs more tracks so that maintenance can be performed without massive delays and so express trains can be run. Coverage is lacking. It's good if you're going places it serves, but there are a lot of places it doesn't go, like Georgetown. And the hub-and-spoke model makes it quite painful for a relatively decentralized city. Going between, say, Bethesda and Tysons is physically possible but takes ages because you have to go all the way downtown first. It gets a lot of things right and is great if it has a good route for the trips you want to make when you want to make it, but mostly it shines because the situation is so much worse in any other American city that's not New York and maybe Chicago. Thanks, good to know! How are the trains across the country though? Trains are not an efficient use of time for travel within the US. The US is huge. If you were take a 300mph (nearing 500kph) train (which would make it the fastest train in the world), it would be OVER an 8 hour trip from New York to LA. (Again, about 2500 miles or 4000k) Even in some of the densest areas, the trip times end up being pretty long due to distances: dc to New York? 600 kilometers or almost 400 miles. People aren't taking trains from Madrid to Tallinn, either. The proper point of comparison here is more medium length trips. There's no reason not to have a high speed train for Portland - Seattle - Vancouver, for example. This is irrelevant, though, since the size of the country isn’t what determines where people go. It’s not like trains got less practical when Alaska got admitted to the union. Sprawling, low density, single use zoning, combined with parking minimums, have much more to do with it. Here’s a video that explores the topic if you’re curious https://youtu.be/REni8Oi1QJQ The question was what the train network is like outside the cities. And the answer is we don’t use trains because it is not efficient for the scale of the country. This is correct. Most people ARE interested in coast to coast travel. It is called flyover country for a reason. There are a few exceptions like the Baltimore corridor, or the San Francisco peninsula, and these are in fact serviced by good trains. Train travel from LA to NY wouldn't be efficient, but there are plenty of population poles like LA to SF where train travel would make sense and a network of those could make cross country travel feasible if not in a hurry. But as the GP pointed out, it is not that useful if you can arrive to LA by train, if then when you arrive you need to rent a car before you've even left the station. It is always shocking to me when I land at an airport in the US and there no public transport available. It is common for conversations about good local public transport to have a retort in some sub-thread about how big the US is, as if the feasibility of long distance travel affected the feasibility of other modes of local travel. You mention the SF peninsula. When I first moved there, I lived in the westside of SF and had friends living in Sunnyvale. On a weekend, it took 4 hs to get to Mountain View (~40miles, at the time, checking now it seems like Caltrain weekend service might have improved, so the same trip would take about 2hs), and then had to be picked up by car to finish the rest of the trip. It was faster (~3:30hs, if more expensive) to go from Paris to Amsterdam (>300miles) by train. It is highly relevant to the question asked. What you’re addressing is how cities should be built. I see your point, but consider this: getting to and through a major airport is a huge pain the ass. Trains also tend to take you to city centers more often than airports, which almost always need to be a significant distance from anything interesting due to the noise. Let's take a hypothetical scenario: - 5 hours flight time (average for NY and LA), 2 hours on each side to get to and from the airport to the actual city. Total is 9 hours. - 10 hours train time and 1 hour on each end (which is generous given the proximity of train stations to city centers), 12 hours. The difference is not that much, and a train ride is so much less faff than a flight that it's not even funny. Little to no security theater, you don't get fondled by security agents, you don't have to stand hours in line with silly passport controls and luggage checkins/pickups. And the list goes on. A good train infrastructure can be vastly more pleasant than a good air infrastructure. Where air wins out is intercontinental flights where trains are truly not an option anymore. If you’re taking more than a half hour to get from the city center to the airport, you’re doing it wrong. Eh, you're overselling it. Even in a hypothetical world with a 12 hour train trip, it still loses to an 8 hour plane trip. You're losing an entire day on the train. You still have to deal with luggage pains, now you're eating on the transportation which will be inferior, and will have similar problems with last mile transportation. Flying is currently not a great 8 hour experience, but it beats losing an entire day. I can do LA to NY for a weekend trip. (I personally wouldn't but there are some that would for sure) Trains can and do make sense even in the US, and we do ourselves great harm by underinvesting in them, but there will always be a place for plane travel. How long would it take from New York to Philadelphia, or Boston to DC? How long would it take between San Diego and SF? What about a train between Chicago and Detroit? We're building a fast train from Toronto to Quebec city in Canada. It's going to be a lot more comfortable and way faster than driving. A MP in my family takes the train from Montreal to Ottawa very frequently, they don't want to bother with parking in the capital and they can work on the train. > What about a train between Chicago and Detroit? I've ridden the Wolverine, it isn't half bad. I 100% agree trains might be underfunded in the US. The LA to NY flight will stay preferred to a hypothetical high speed train due to time. It is unlikely ever to be less than 10 hours. For train rides under 4 hours, and if you can get trains running smoothly (less stops), the time spent on the train and the overall integration of trains is a lot better as a mode of transportation. NY to Philadelphia is relatively fast. There was a faster train on that route even before Acela (Metroliner). Boston to DC is a fairly long day by train and, while I've done it, no business person who is really on a schedule is going to vs. taking a pretty short flight. (And, if you're really going city to city, both cities have close-in airport options.) It's pretty good in NYC. I heard it's nice in Boston too. Compared to rest of US? Maybe. Compared to Europe? Absolutely not. I don't think so, the busiest lines of the London subway ("tube") don't even have AC. I also rode the subway in Paris some years ago and it wasn't anything to write home about. If they ran the suburban rail more frequently Boston would have a phenomenal system. The suburban rail in Boston is very much commuter rail. I live about 50 miles west (pretty near a station though I have to drive) and I'll absolutely take it for a 9-5ish urban event. But it's completely useless for anything in the evening. NJ Transit is commuter rail and they made it not suck by providing usable evening and weekend service. Different cities. Different transport situations. I'm not convinced I would take commuter rail in and out of where I live to Boston even if it ran more frequently. Chicken and egg and all that but it's empty in the evening as it is. Even the reverse commute in the evening is annoying but then it's quite straightforward to go home. There are usually reasonable parking options. Personally, not sure I'd use it outside of rush-hour in and back. The point is, NJT had poor limited service 25 years ago and rectified it. Its good in NYC for american standards. For european standards the NYC subway is abominable. The smells, the grime, the homeless, its honestly like visiting the 6th ring of hell. Source: I am a european living in NYC. It’s not much different from Paris subway. We should still strive for better - Taipei is a much better model than any European city. Paris as a city has gone very downhill the past 5-10 years. The subway there is a prime example. I've visited Paris and London a few months ago as a tourist. I am really impressed by London public transport, both the classical red double deck buses and the subway. When I visited London for the first time (from germany) I was impressed by how you can pay for the tube by swiping your credit card at the entry and exit. It's not just a great experience for the rider, but it also gives the transit agency the resources and the incentive to improve. A new line is not a question of politics, it's just profitable. Some bits about the service can be pretty astounding. I used to live near the Central line. The station near home was open air and the exit was at the very end of the platform, so I always wanted to make sure I entered the train from the correct end. Service on the Central line is frequent enough (24 trains per hour off-peak), that, if I hopped off the train from the wrong end, the time it took me to walk the length of the platform was long enough for the next train to arrive. Hah, the joys of optimising your morning commute on the Underground. “If I stand here on the platform, then the door will open right in front of me, and I’ll be exactly at the exit of the next platform where I need to change…” Yeah or “the signs all say to walk down this long passage, and then back via a circuitous route for flow control, but my destination is actually 100 feet away through this unmarked passage so I’ll just go that way” situation at Bank I've lived in London for a decade, and feel incredibly lucky to have access to the transit here - having lived in Aus, NZ and Canada previously. It's not perfect. It's late sometimes, pollution sucks, and often crowded - but people here who like to criticise it really don't recognise how much better they have it than lots of other places. Same with travel from here to Europe (by train), is just awesome. > Under the project name of Crossrail, the system was approved in 2007, and construction began in 2009. Originally planned to open in 2018, the project was repeatedly delayed [...] The service is named after Queen Elizabeth II, who officially opened the line on 17 May 2022[...]. I wouldn't say thin air, exactly. >> I wouldn't say thin air, exactly. Fair but have you seen how long things take in the US? The original proposal for the 2nd ave line was in 1920 and they have only managed to deploy four stops. I read about it in the news when I was in 5th grade and still read about it now, 40yrs later. https://en.wikipedia.org/wiki/Second_Avenue_Subway Similar for the Hudson tunnel which is supposed to allow commuter trains to function w/o the current madness... The Elizabeth Line was unbelievably expensive to build; that's how the UK did it. >> The Elizabeth Line was unbelievably expensive to build; that's how the UK did it. Fair. But what is also expensive is every single citizen taking $100 Uber rides to the airport, like in NYC. In NJ, the transit service has become so volatile and sporadic and opaque that people have reduced NJTransit use for Newark airport in favor of simply driving. That cost doesn't show up on government books, so we can pretend it doesn't exist. The joys of decentral planning. We don't have to pretend it doesn't exist. It actually doesn't cost the taxpayer anything. > But what is also expensive is every single citizen taking $100 Uber rides to the airport, like in NYC. Last time I went to NYC I took the AirTrain to Jamaica station and then an express train to Penn. it took like 35 minutes total. Wrong, $100 Uber rides boost employment and the economy! (Just ignore the impacts of congestion, wasted time, road spending) But it is also really good. I love the completely enclosed platforms, ie shielded from the track and train by a glass wall/doors, like the Jubilee line, but all the way to the ceiling. This makes it both safe and very quiet. Though the platforms are huge, as the trains are long, you have to really make a conscious decision on which exit to use as they come up very far from each other. Unlike other tube stations, where if you don't pick the most optimal exit, you just have to cross the road. It's a massive investment in the areas near its stations. Yes national money once again mostly being spent in London. Coincidentally where these decisions are made. The whole section from Reading to Iver is outside London. Also 20% of the UK lives around London so it makes total sense to invest in the area. having done a lot of work on it in a previous career, I can confirm that it was born out or no shortage of blood, sweat and signalling snafus. And for a city that wants to be a global startup hub, that kind of frictionless mobility matters way more than people realize Many European cities have this. London has the biggest, though. And Asian cities. Paris has a metro, Berlin has a metro, Tokyo has a metro, many cities in China but that information is a bit less accessible. China built an entire national high speed rail network while America was waiting to see if the Hyperloop was anything. I live in a big continental European city that also has a start-up hub. The companies here are also small, creative, solving problems, but don't necessarily aim for an exit and growth at all costs, many of them want to create a sustainable business solving a need that people have. I think, to the economist, these are just SMEs and a start-up is about making money, an IPO, an exit, the unicorns. And of course London as one of the largest financial hubs will be a good place to start such a business. But I've always thought of these "SME"-type start-ups as belonging to the start-up category too; after all they "start up" a company and often have ambitious goals and creative, tech driven approaches to solving problems. This is how I've thought it would work when I was younger, and it is how I still think it'd be good to do today, and how I'd try to build a company if I have a good idea to pursue. Anyways, the point I want to make re the article is that I think the definition is narrow, leaves out a bunch of interesting companies, and thus skews the picture towards London. There are plenty of innovative places around Europe, it's just a different model of doing start-ups. IMO this overly financially motivated view onto the start-up world is quite a bit less interesting than a the broader (maybe harder to quantify) picture. I think you're right that the ambitions in Europe are smaller and I'd say more likely healthier for those involved and maybe the world in general. I have spent some time working in a start up hub in Scandinavia and there was the usual talk of innovation, disruption, work hard, etc... but by 4:30 the offices were empty and people had gone home to their families. Work life balance still came first. It's not that the founders have smaller ambitions, it's that they can't find fundings to really grow the size of US tech companies. And when they do find fundings, it's in US so they move their company there. Any time you use the word startup you are already ceding ground. Startup as a term solves the problem of the VC: given technology is inherently risky, how do I get good returns? Answer: make sure the winner keeps doubling down. Create a culture around valorizing the few big, big winners and writing off-- financially and mentally-- the losers. 14 years ago now: https://www.paulgraham.com/growth.html Of course, this culture is less helpful for individuals and cities, who have to live with the volatility. I feel that these shouldn't be alternatives. Calling something startup is up to the definition that we use; one that I like is the following: A seed round of million of dollars might not make sense for a flower shop, but could be reasonable if you plan to develop the next generation B2B flower shop SaaS integration. Why should it grow to 100M in 5 years? A business can make $500k profit per year, with two employees, forever, and that's a moderate success. Sqlite is doing just that. And they're not captured by exponential growth, they're not going boom or bust filling sqlite with advertisements and AI. They just make a solid product that works. Is that bad? Depends on the market size. If the market is 100M, then a 500k profit effectively means your product will be inferior and poorly placed to evolve. If the market is 500k, then by all means go ahead. Startup are designed with explicit purpose of designing a product to capture that market without having to worry about the revenue during the time the product is being made. But of course capture does mean capture quickly because of the first mover advantage. Nobody's saying that's bad. but it's not a startup. A "startup" is defined by growth. https://www.paulgraham.com/growth.html Businesses that don't have the ambition to grow very quickly should not take venture capital. It's a waste of everyone's time and energy You say this as if venture capital is lying there on the ground for anyone to pick up. What VC do you know that aren't investing in companies that want to grow very quickly (or in companies that they then force to grow quickly)? > A company that just started that can scale to 100M evaluation in less than 5 years. How can you assign a name to something based on what might happen in < 5 years ? Whether the company targets or not that goal is a major distinction. For example if I open a restaurant I'm 100% guaranteed not to be valued 100M in 5 years. If I target to be the next social network and compete with TikTok, then it's a startup. Goal, ability to scale, global business from the onset, etc. are things you can perceive today without being able to read the future. Europe has plenty of cities that are great if your goal is "build something useful, make money, don't sell your soul," and those don’t show up in these charts That probably applies to many cities of economically advanced (or even less advanced) countries. I think the (Anglo-Saxon) startup narrative for too long has been about growth at all cost, go big or die trying, sell out your company as early as possible to VCs and be essentially employed by them as a founder. Starting a normal innovative, profit-making company and growing it sustainably is just non-news, unfortunately. I really hate the exponential growth every year, which is physically impossible, instead of a plain "sustainable business solving a need that people have." as you mention. Naturally as soon as the need is covered, and there are no new people to sell the product to, the exponential growth every year mentality bursts into entshitification, or firing half of the company because the targets weren't reached, but no worries at least the shareholders are happy. Maybe it is my European mindset that cannot grasp this MBA mindset into creating /destroying jobs as if people didn't matter. I mean, I do slightly appreciate this (not all businesses need to grow 10X every year to succeed), but the other way of phrasing it is that London produces lots of business that generates lots of money. Is this really surprising? London picks up all the advantages of the UK (legal system is sound, eg in contract law, native speakers of English, the lingua franca of business, strong university tradition) and adds in its special sauce: access to the City, global-tier culture, excellent public transport (I know we moan about it, but it really is excellent), and a timezone location that easily serves the US and Asia markets. The awkwardness for founders in London is that when they want to IPO, London doesnt have nearly as deep a pool of capital as the US, so they are potentially leaving a lot of money on the table. US founders have essentially outsourced risk to London. > What London actually built is Europe’s most efficient farm system for US acquirers. The city does the expensive, risky work of finding founders, funding early rounds, and proving product-market fit. American companies wait until the risk is de-risked, then buy the winners at discounts enabled by London’s shrinking public markets. It's a classic example of how natural advantages and network effects can overcome mediocre to poor policymaking. The UK has been run by blithering idiots for decades at this point, but London has survived so far Maybe the UK has been run by blithering idiots but the business environment and regulations are still among the most attractive in Europe... not sure what that says about the other European countries. In Germany you need 25k$ and 6-12 months to establish the equivalent of an LLC. This is because Germany hates limited liability. It would prefer you to operate as a sole trader with unlimited liability, and then not do things that generate liability. Needless to say, this is scary for programmers. hopefully soon down to 48h with EU-INC Just like the EU forced Germany to to stop prosecuting coffee shops for having public wifi. Indeed, I can't speak for how other European countries work but if the Labour/Conservative/Whitehall nomenklatura is producing better results than your political system, something is very very wrong Startups might thrive there, but business investment in England (particularly in mature businesses) has not exactly been lively ever since Brexit. I can't recall the last time I heard someone talking favorably about investing in England, or at all, really. right, people will just tell you the best places and things to invest in ... during a game of chess: "hey why'd you make that move?" "hey why'd you make that bid?" is a valid question that must be answered during a game of bridge.. I don't know bridge and I did not google. Would you be so kind to be verbose? Your comment made me curious ... but I was busy Or since the anti-corruption reforms of 2015-2018. Which frustratingly overlap with Brexit, making it hard to tell whether this is “good driving business away” or “bad driving business away.” First I've heard of this - which anti-corruption reforms? UK Anti‑Corruption Plan 2014-2015 Small Business, Enterprise and Employment Act 2015 - outlawed bearer shares UK PSC Registry 2016 Action Plan for Anti‑Money Laundering and Counter‑Terrorist Finance 2017-2022 Money Laundering Regulations 2017 Sanctions and Anti‑Money Laundering Act 2018 London ends up being this amazing on-ramp into global tech, but not quite the place where the biggest companies finish their journey Is deep enough pool of capital for the vast majority of businesses. Its cultural diversity is a plus for most people (other than people like DHH). The big problem with London is that it is very, very expensive. > Its cultural diversity is a plus for most people Cultural diversity is not a draw. Africa, Latin America, and Central Asia are all culturally and ethnically diverse. No one moves to any of these places. The primary draw of a city like London is economic prosperity, which is ironically usually only made possible by ethnic homogeneity. This is the case in Britain’s former colonies (USA, Canada, Australia, New Zealand), China, Saudi Arabia, etc. Target cities become “culturally diverse” due to the arrival of migrant labor. The migrant labor itself is not seeking this diversity out for its own sake. New migrants have their movements facilitated by networks of already-landed migrants, who provide knowledge of the immigration process, employment opportunities, and material assistance to their coethnics. These people are not moving to London because they can find people like themselves there (there are already plenty in their country of origin), nor are they moving to London because they want to experience other cultures (this was a form of conspicuous consumption that went out of fashion years ago). At best you could say they hope that the relative ethnic heterogeneity will distract from their own foreignness, but that still doesn’t amount to being drawn to diversity. > This is the case in Britain’s former colonies (USA The USA was never a colony of britain. The american colonies were. > The primary draw of a city like London is economic prosperity Then tokyo or singapore or dubai would have been even greater draws. But they are not. What becomes a "tech capital" is primarily a political decision. If london is a major tech center, it's because of political decisions within britain but primarily outside of britain ( the US ). > The USA was never a colony of britain. The american colonies were. This is inane. > Then tokyo or singapore or dubai would have been even greater draws. But they are not. This doesn’t logically follow, but even if it did, Tokyo is an attractive destination for immigrants, even with the Japanese being notoriously xenophobic. Japan is homogenous and economically prosperous, the difference is that it restricts migrants from entering. Singapore has a huge population of day laborers that live in Malaysia and commute to Singapore. The majority of Dubai’s population is comprised of foreign laborers. > If london is a major tech center, it's because of political decisions within britain but primarily outside of britain ( the US ). And how do those decisions get made in the absence of a cohesive society capable of making them? To add on this, ethnic heterogeneity (and ethnic enclaves) is one of the shallowest forms of diversity. If you examine the diversity regarding district characteristics and architecture, shopping options, subcultures, etc, many homogenous cities like Tokyo or Hong Kong are far greater and accommodating than London in diversity. And I would say that one reason for that is the elements I mention is something an individual can take seriously and integrate into their own world, while enclaves stay perpetually from the vantage of exoticism rather than integration. Housing is super expensive, but even that is coming down. Transport is a bit expensive, bit it's fine. Everything else is pretty reasonable! Is it really coming down? Only in London, UK, Europe, or more or less globally? Where are you getting this from? I am not sure everything else is reasonable if groceries alone have been going up by as much as 100% throughout the world, heh. Maybe on an SWE salary it is reasonable, sure. I was going to reply to grandparent that only flat prices are coming down because of rising service charge costs, and being hard to mortgage because of cladding issues. But after some research it is indeed true that house prices are, to a lesser extent, also going down, at least in real terms, if not nominal. I actually wrote a webapp to show this, check it out - https://housepricedashboard.co.uk/ London house prices are falling quite a lot in real terms. Nice work. Have you considered add real terms changes? Already a feature, you can switch between nominal or inflation adjusted in the Change View panel -https://housepricedashboard.co.uk/?tab=change&start=2014&end... I am getting DNS_PROBE_FINISHED_NXDOMAIN. Ah shoot, it's not .com, it's .co.uk. So https://housepricedashboard.co.uk.
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A friend of mine used: A startup is a temporary operating model designed to discover a repeatable, scalable, and profitable business.
From these point of views, there are a lot of wonderful SMEs that need to see the ligth. They should be supported by the government and the community, but they need very different tools from what we define as startups. A company that just started that can scale to 100M evaluation in less than 5 years.
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