“Right now, Silicon Valley is the leading place in the world for high-tech growth and innovation. But there’s no reason why it has to be so predominant. Our ambition is to bring together the creativity and energy of Shoreditch and the incredible possibilities of the Olympic Park to help make East London one of the world’s great technology centres.” – reads a recent statement from UK Prime Minister David Cameron.

Undoubtedly a great ambition, and also one that could truly inject life into the Olympic Park after 2012, preventing it from becoming a ghost town, which many Londoners fear could happen unless the area is adequately utilized after the Games. The truth is, however, there has to be more to this vision than just words to make it come true – and that won’t happen overnight.

Much has been said lately about the Silicon Roundabout – as the area around the Old Street/City Road junction comes to be called. The cluster of media and technology companies based there has been vigorously promoted by the government as the future hub of creativity and technology innovation. Indeed, the area seems to be swarming with digital agencies, e-commerce firms, web developers, etc.

The challenge with Silicon Roundabout, however, seems to be that while most of the technology companies based here do have creativity by the bucket, their innovation is market- rather than technology-driven.

They are fundamentally different from the majority of Silicon Valley start-ups in that the products they come up with are applications of existing technologies and platforms rather than entirely new ones that fundamentally change the IT world. In that sense, the majority of them are followers rather than trendsetters in the technology space.

There is, of course, nothing wrong with this approach – coming up with new applications and business models does carry, after all, plenty of value to the UK economy. But until the shift to technology innovation occurs, Britain will likely remain a satellite in the innovation world rather than the axis around which other innovation centres evolve.

My company has two offices that are a stone’s throw from the Old Street/City Road junction, but so far the one prevailing benefit that I have seen coming from the location in the Silicon Roundabout area is its immediate proximity to my customer base in the City – with both telecom operators and financial services firms maintaining offices there. I am yet to truly experience secondary benefits such as talent or knowledge transfer.

Not all is lost, however. The fact that many large technology conglomerates like Intel or British Telecom have responded to the Prime Minister’s call is encouraging. To truly turn East London into a leading centre of innovation and high-tech growth, however, the government will need to look no further than the “original” and try to create the same unique environment in which innovation can thrive.

Two things that are necessary is access to ample venture funding and the right academic background – currently, East London has too little of either. Even though the City is just round the corner, technology start-ups carry very high risk, and British venture capitalists are considerably more conservative than those in the West Coast of the US.

Even though Imperial College London and Cambridge are both less than an hour’s journey away, their world-class engineering graduates are not exactly known for settling down in the Shoreditch area.

One idea to solve both these problems could be in setting up a ‘version’ of a Special Economic Zone (SEZ), with government-approved businesses based in East London getting tax exemptions for a specified period of time. Using this approach, Poland (where 14 of these Special Economic Zones are in place today) has managed to attract a significant amount of Foreign Direct Investment (FDI) from abroad.

Maybe a similar blueprint could enable Britain to both attract more venture capital, as risks of start-up defaults go down, and retain more talent, as it makes more business sense to develop your ideas yourself in Shoreditch rather than anywhere else.