Entrepreneurs are ‘drowning’ in incubators, says tech expert of government’s Silicon Roundabout | Video

World Finance interviews Hanadi Jabado, Director of Accelerate Cambridge, to discuss whether the government's Silicon Roundabout incubators have any intrinsic value

April 16, 2014

Has the government’s Tech City initiative – otherwise known as Silicon Roundabout – helped entrepreneurs realise their dreams? One silicon-sceptic is Hanadi Jabado, Director of Accelerate Cambridge and a technology expert. World Finance speaks to Jabado to hear her views on incubators, and whether tech city is anything more than a marketing initiative.

World Finance: Hanadi, why do you think this is the case (that business incubators can be cemeteries):

Hanadi Jabado: You put in the same room 50, 100, 200 people, who do not know what they’re doing, who have no clue where they’re going, who have the need for support, for mentoring, for coaching, and for guidance. And they’re looking around, and everybody else seems to be drowning, and so they drown too. If you need high tech, broadband office space, then yes, go to an incubator. But nowadays, everybody can get broadband in their kitchen. I work from my kitchen quite often.

World Finance: But do you think that there is no intrinsic value in having those incubator/hub models?

Hanadi Jabado: There was once upon a time. So when incubators started being set up, there was a need for them. There was a need because people didn’t have the infrastructure to be able to work from home. No one had high speed broadband at home, ADSL didn’t exist. You needed to get out of your house and go somewhere where you could get connected should you enter the digital age. Nowadays we don’t have the same need. If you are in the start-up world, there’s a flow going. You need to meet likeminded people. I am extremely lucky, because I work in Cambridge. I meet investors riding the bike. I meet entrepreneurs on the train. I am not sitting in a hub waiting for them to come and talk to me, they come and find me.

World Finance: So why do you think the idea has continued to take off here in London?

Hanadi Jabado: Nowadays people want to be entrepreneurs. They don’t really know what an entrepreneur is. They don’t really know what an incubator is. They don’t really know what an accelerator is. But they very much want to be an entrepreneur. And if you are telling them that Tech City is great, and Tech City is creating all of these jobs, and that Tech City start-ups are so successful, well, they will believe it and they will come, and they will want to get closer to the light.

World Finance: So do you think the gospel of the government is working?

Hanadi Jabado: I definitely believe that there is a huge marketing effort behind Tech City. I read a press release about Tech City, and it said that Tech City was launched in 2010. Well, you launch a new movie, you launch a new product. You don’t launch a cluster. Clusters get organically created.

World Finance: In terms of hubs, there was this national push, it was called the National Virtual Incubator program. It was a partnership by Cisco Systems and the Cameron government, the intention being to link up start-ups across the country. Do you think that was actually created, or are we just looking at one big London incubator?

Hanadi Jabado: The national virtual incubator has been launched, it does exist. It is struggling to take off. The nodes, as they call them, the local clusters, were identified, and they were connected. However, nothing is happening and there hasn’t been anything really taking off yet, so there’s no traction. Cisco have been using the national virtual incubator to create their own innovation centre, or incubator, or whatever you want to call it, guess where? In Tech City, next to Google Campus, and it’s called Idea London. Did we need another incubator in central London? I genuinely believe that, had they built Idea London in the middle of nowhere, where rent is low, where life is cheaper, entrepreneurs would have thrived, and the local economy would have been boosted.

World Finance: So who loses when nationwide efforts then kind of whittle down into very locally focused projects?

Hanadi Jabado: The entrepreneurs definitely do. The innovators definitely do. The taxpayers do, because it’s their tax money that is invested in those projects.

World Finance: Now let’s talk about the experience of a Google Campus, for instance. Do you think having a hub in a location where people of like minds can come together in any way commodifies the creative experience?

Hanadi Jabado: We have similar outfits in Cambridge, and we have the traditional St John’s Innovation Centre, one of the very first incubators in the United Kingdom, and what they do is amazing, and they are helping entrepreneurs who are more established, who can’t afford to get their own office space. But we also have a lot of Google Campus wannabes, people who rent huge space and then sublet it to entrepreneurs who are desperate to get through. However, the experience of those entrepreneurs is that they get there, and yes, they do meet other entrepreneurs, but they also meet them in the colleges, they also meet them in the supermarket, they meet them on the street, they meet them at lectures. They do not get a unified experience, because there’s nothing happening, they’re just working as if they were working, again, from the comfort of their kitchen.

[T]hey will realise that actually innovation can only be harnessed, it cannot be manufactured

World Finance: OK, now let’s talk about marketing. There’s a press release on one of those Tech City London websites, in which Number 10 issued a statement that said Tech City, also known as Silicon Roundabout, has grown from 15 tech companies in 2008, to topping the chart for new business generation in the UK in 2013, with more than 15,000 new start-ups. Do you believe that?

Hanadi Jabado: There probably are 15,000 start-ups, but how much of those will still be alive tomorrow? How many of those will still be surviving in three years? What are their contribution to the economy? How many people are these start-ups employing? What is their contribution to the rest of the wider United Kingdom economy? I would like to invite David Cameron and his government to take a look at a very good website called The Cambridge Cluster Map, that quantifies the contribution that Cambridge has had to the economy, and I would invite them to try and set up something similar for Tech City, so that we see if the numbers that you are quoting from the press release, how they evolve over the years, how can we quantify it? And I would like to invite them to go on one of our executive education courses innovation, and maybe they will realise that actually innovation can only be harnessed, it cannot be manufactured.

World Finance: OK, well thank you very much for joining us today.

Hanadi Jabado: It’s a pleasure, thank you very much for inviting me.