Why Old Street roundabout is London’s HS2

After six years of construction, the ribbon is about to be cut on Old Street roundabout, home to many innovative UK startups. The project, which was originally planned to complete in 2020, will now open in early 2024 according to Transport for London (TfL).

Launched to improve safety on the east London megajunction, the scheme has also become known as the ‘Silicon Roundabout’. This is due to its similarity to Silicon Valley as one of the UK’s largest clusters of tech companies.

The new road network was expected to encourage further tech growth and innovation. However, comparisons have since shifted to the broken promises and cancellation of High Speed 2 (HS2), and its saga of delays, budget overruns, and dashed hopes.

Much delayed and over-budget, the opening of Old Street roundabout has now come to represent the mouldy cherry topping off a difficult few years for UK tech firms.

From startup haven to traffic hell

Silicon Roundabout was initially envisioned to supercharge the UK tech scene. The upgrades would help it ‘level up’ to the same successes exhibited by its stateside counterpart, Silicon Valley.

These plans have been in the pipeline since 2012, when initial designs to revamp the notorious roundabout were pitched to the general public. With aims to enhance traffic flow and pedestrian safety, completion was originally slated for 2020, on a budget of £50M.

At the time, a government press release described the plans as a “visionary project to regenerate the Old Street roundabout, which will see it transformed into Europe’s largest indoor civic space, dedicated to startups and entrepreneurs in East London.”

Anyone who has paid a visit to the area in recent years will struggle to align that description with the scene around them.

Since work finally began in 2019, the space has become a snarled knot full of delayed traffic and pedestrian hazards. The result has been frustrated commuters, tech workers, and businesses.

Delays are due in part to the pandemic and national lockdowns, which began shortly after ground broke at the site. But another hurdle was the complexity of the plot, as the roundabout sits above a London Underground and national train station.

Recent estimates have put the total forecast cost for the construction project at £132M, representing an overspend of £82M from the initial funding awarded to TfL.

How Old Street and HS2 became city-sized headaches

Old Street’s lost ambitions can’t help but invite parallels with another ill-fated infrastructure project, HS2.

The once-gleaming vision of a high-speed UK rail network is now expected to be delivered 19 years later than planned, and with half of its major legs scrapped. A £37.5 billion price tag has also morphed into a staggering £106 billion.

As a result of the cancelled work, network improvements will almost exclusively take place in the South of England, aggravating the North-South divide the project was set up to fix.

It is unclear what the consequences of Old Street’s delays will be. However, many of the companies that made corporate commitments to east London’s ‘Tech City’ have since abandoned them, turning Silicon Roundabout into an emblem of the area’s lost potential.

They include Google Campus, a seven-storey hub for the tech and media community in East London which closed in 2021, and TechHub, home to hundreds of startups at the heart of Old Street. Both offered events, mentorship and classes for growing businesses.

Tech startups shown hiring red light

Old Street’s (hopefully) grand opening later this year may come too late for the UK’s science and technology sector. The industry faced a trifecta of challenges in 2023, significantly choking growth.

The first blow came from the defunding of Tech Nation, a vital source of support for early-stage companies. The decision surprised many, and left hundreds of founders scrambling for new funding and mentorship in a lukewarm fundraising climate.

Crucially, that included the loss of the programme’s Global Talent Visa scheme. Foreign talent is a crucial pillar for many tech companies. The ongoing digital skills gap has left many employers struggling to find job-ready talent to ensure they can keep up with the business world’s rapid digital transformation.

Complex application processes and Right to Work checks introduced post-Brexit have already dissuaded many of the top workers and their families from moving to the UK, forcing companies to scale back ambitious plans.

Despite the Global Talent visa returning in October 2023, issues with the tech talent gap once again worsened last month when stringent new visa regulations were introduced.

As a result of the minimum salary requirement for a skilled worker from overseas being raised to £38,000, hiring from abroad will become unaffordable for cash-poor startup bank accounts.

These struggles have compounded in today’s poor economy. Like many sectors, rising inflation has squeezed profit margins at tech companies and investor confidence, leaving innovative startups that are seeking funding particularly vulnerable.

Could AI show Old Street to the right exit?

Time will tell if the new Old Street roundabout lives up to the hype, or remains a symbol of a project gone off the rails. Local firms have become used to assurances that the roundabout will be “opening soon”, and the current delivery deadline of early 2024 is suitably vague.

Still, that Old Street roundabout is due to open at all puts it leagues ahead of HS2. The revamped roundabout features safer cycling lanes and improved traffic flow, perhaps signalling that UK tech is on a better track this year.

The sector is now setting its sights on a new frontier: becoming a global leader in AI startups. AI emerged as one of the most exciting areas of technological innovation in 2023, with both companies and employees embracing artificial intelligence this year.

Prime Minister Rishi Sunak backed policies to support the safe and responsible development of the technology during the global AI safety summit, held in November, as a way to accelerate the UK’s ambition of becoming a science and technology superpower by 2030.

It may not have gone smoothly so far. But with continued government support, Old Street’s tech ecosystem is well-positioned to establish itself in the developing world of AI startups.

After the trials of last year, is there hope on the horizon for tech in 2024? Who knows. But as any entrepreneur will tell you, when it comes to business, it’s all swings and roundabouts.