It’s easy to mock the beards, tattoos and fixed-wheel bicycles of east London, but its ‘flat white economy’ is here to stay. Ed Cumming on the revolution that’s changing Britain
Cereal Killer is a café on Brick Lane in east London that serves breakfast cereal. It opened last December to a fusillade of indignant fury. What kind of fool would pay £3 for a bowl of something when they could go to a supermarket and buy two boxes for the same price? A reporter for Channel 4 asked the café’s owners, bearded Irish twins Gary and Alan Keely, whether it was sensitive to open such a ridiculous restaurant in Tower Hamlets, one of the poorest boroughs in the country.
More than anything else, however, the new café was seen as the latest high-water mark of hipsterism, a sign that the specialisation of leisure pursuits in east London had gone too far. Twenty-first-century hipsterism can be hard to define, but you know it when you see it. Beards, plaid, tattoos, thick glasses, fixed-gear bicycles, artisanal breads (artisanal anything, really), Apple products, cold-pressed juices… these are some of the outward signs. But a new book by the economist Douglas McWilliams, The Flat White Economy, suggests that hipsters, and the ecosystem surrounding them, represent the future of British prosperity. Not only are they greener and more ethical than the rest of us, but the industries in which they work are driving our economy. We mock them at our peril.
Perhaps fittingly the book has had a choppier passage to publication than your average pop-economics number. The chairman of the Centre for Economic and Business Research (Cebr), and a free-market conservative who has advised George Osborne, McWilliams was in the news last week when he announced that he was taking a sabbatical in the wake of allegations that he smoked crack cocaine at a house in Hornsey. It was unfortunate timing, a fortnight before the book’s release.
Named after the favourite drink of the fixed-gear generation, the flat white economy is a portmanteau phrase for an “amazing phenomenon that has surreptitiously changed the whole nature of London – and to some extent the UK economy”. From Cebr’s offices in Old Street, McWilliams had a front-row view of the changes during the past decade. What was once a hub for artists and bohemians has become the European centre for a creative, internet-driven new wing of the economy. With the reputation of the financial services in tatters and more traditional industries continuing their decline, this new source of growth has appeared just when the country needed it. To walk from Old Street roundabout to Shoreditch High Street is to see an extraordinary mix of open-plan offices and galleries, Asian restaurants with fat queues outside and cafés that will mend your bicycle, sprinkled with shark-eyed estate agents and a few resilient kebab shops. It breeds resentment and satire – none more prescient than Charlie Brooker’s Nathan Barley, a decade old this year – precisely because it is dynamic and interesting.
The flat white economy is driven by online retail and marketing but it comprises many different businesses: McWilliams argues that it is mainly defined by the types of people it employs. At the consumer end this leads to cafés and niche shops, such as the shipping-containerBoxpark in Shoreditch. The new trendsetters don’t have as much money as their “loadsamoney” forebears from the financial services in the 80s and 90s, and as a consequence their spending patterns are driven by novelty rather than cost. “They can’t price their styles out of the market, so to keep ahead their styles have to keep changing,” McWilliams told me, when I spoke to him before last week’s allegations. “They also drink an awful lot of coffee.” (The stats bear him out. Since 2007, coffee sales have risen by 50% while sales of champagne have fallen by a quarter.)
Neither do they have much space. “They share flats and often share bedrooms,” he said. “They don’t have space for cups and saucers and dining rooms, so it makes more sense to head out to a café for breakfast. They save on ownership and travel light. They wear skinny jeans instead of suits. They have one or two expensive electronic products, but on the whole they are less materialistic than their parents’ generation. They buy bicycles rather than Porsches.”
And they work, most likely, in a job powered by the internet. In the two years to March 2014, 32,000 businesses were created in a single Old Street postcode – EC1V. It is an extraordinary figure, even if some of them are just lone wolves with a MacBook. At the last census 150,000 people in London were reported to be working in the flat white economy, although McWilliams thinks that this may be closer to 200,000 now. The majority work in a tiny area around the Old Street roundabout. At its peak, the City of London employed 390,000. McWilliams’s book says that in 2012 the flat white economy contributed 7.6% of the UK’s GDP. By 2025, he estimates, it will be 15.8% and will be the largest single business sector in the UK.
“It’s said that Britain has not been good at creating technology: the Facebooks, the Googles, the Amazons,” McWilliams tells me. “But what people don’t realise is that Britain has been very good at using the technology. In online retail and marketing, this country leads the rest of the world. These are areas where creativity yields real value. I wonder if part of the reason British companies don’t become Facebook is because British people are too polite to become billionaires.
“You’d have thought that America, which is where catalogue shopping took off and population density is much lower, would be a good place for this kind of business, but it hasn’t happened. I don’t really have a good theory for why that is – perhaps in Britain we are trusting. One of the reasons people are apprehensive about shopping online is a fear that their card details will be stolen, but we have quite a low level of fraud.”
The future is hip: Chris Morton, internet entrepreneur and founder of Lyst. Entrepreneur Chris Morton, 32, has a different explanation. With a neat Tom Ford beard and a smooth mid-Atlantic burr (he was born in Oxford, but spent some of his childhood on the east coast of America), he would make a good poster boy for British entrepreneurs. After reading natural sciences at Cambridge he worked in venture capital before founding Lyst in 2010. The site offers a personalised shopping experience, using data to help users generate their own digital shopfronts from the possible millions of items on the market. In a world where more or less everything is a click away, Lyst aims to help shoppers sift the chaff.
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“In Britain the department stores were slow to catch on to the internet, much slower than their American equivalents,” he told me. “That void created space for new companies, like Asos and the Net a Porter group, to spring up. People don’t realise it, but Britain’s online fashion businesses have been worth more than $10bn. New York and the Bay Area in California don’t come close to that.” Lyst has expanded quickly, from 20 employees to 80 in the past year alone, and occupied four different spaces.
“East London is the best place in the world to start a business like ours. All of our offices have been within a two-minute walk of each other. We started in Hoxton Street and then moved to a place off Curtain Road, and then to opposite Shoreditch High Street. Finally, last year, we moved to the White Cube gallery in Hoxton Square.”
Between 2000 and 2012, White Cube was a focal point of the Young British Artists movement – where the Damien Hirsts and Tracey Emins would meet and exhibit. It feels appropriate that the space has now become a home for the new iteration of Shoreditch, where the medium is pixels rather than paint.
“When we first came there were few other companies here,” Morton added. “It was cheap – the rent was just £3 per square foot – but it was also fun. There were bars to hang out in and whenever you left the office you would bump into somebody else starting a different business, but with similar problems. You could share tips about what kind of cloud computing to use or whatever. Those ad hoc meetings are incredibly important in this industry. Since we arrived an ecosystem has grown up that acquires its own momentum.”
There are problems with the speed of growth. Rent in new offices is now £60 per square foot. No wonder the artists have gone elsewhere to starve in their garrets. Given the difficulty of getting funding and income in the early years of a tech start-up, and the possibilities the internet allows for working remotely, you might think that the industry would be more dispersed. But Morton said the opposite is happening. It is more important than ever to have everyone in the same space.
“Many of our employees live in Bethnal Green and Dalston and Islington, so it’s easy for them to cycle in. Developers and data scientists might be working for banks in the City. They can look down from their tower offices and see Shoreditch and think, ‘Why am I up here being part of the corporate machine, when I could be down there helping to change the world?’ To start a business you also need access to venture capital and almost all of those guys have moved here now from Mayfair.”
He added that the lure of working in this part of east London helps him draw talent from far and wide. “We have an incredibly diverse workforce. There are people from all over Europe, from every different walk of life. It’s very gratifying.”
According to McWilliams, the capital’s talent pool, continually refreshed by immigration, is what sets it apart. “People do seem to be more creative in London,” he told me. “The mix of races, genders and backgrounds seems to generate a flow of ideas. Other parts of the economy might move out of London, but anything that depends on creativity will remain London-based.” While other jobs are increasingly replaced by machines, those that demand a constant stream of creative thinking will endure.
It can be tempting to see the world that has been created in this part of east London over the past five years as a model for modern cities. A highly skilled, creative international workforce, commuting by bicycle, thinking hard about where their meat comes from, buying second-hand clothes and selling complicated things to buyers around the world. If you close your eyes and try hard to put aside any prejudices about men with waxed moustaches riding penny-farthings, Shoreditch can appear like a kind of idealised cross between Stockholm and Silicon Valley. Plenty of people hate hipsters, but if more of us lived like them, the world could be greener, more left-wing and less preoccupied by greed.
“I think there has been something of a philosophical change,” said McWilliams. “People are becoming less materially driven and more about experiences. Although the economics have made it convenient: it is expensive to store things, while cheap flights have made it easy to pop over to Berlin for the weekend.”
The Boxpark pop-up shopping mall in Shoreditch, London Photograph: Alamy Critics argue that what has happened in east London is unsustainable and brings plenty of its own problems. According to the 2011 census, the percentage of people working in the creative, media or sports industries in Hackney rose more than 65% in the decade after 2001, and by nearly 50% in Tower Hamlets. Including the past four years the figure would be even higher. According to Rightmove, a property website, the average residential property in EC1V was £469,000 in June 2009 – in June 2014 it was £914,000 (although it has levelled off in the past few months). Families who have lived in this part of London for generations are selling up.
The rise of the flat white economy is only part of the explanation: improving schools and decreasing levels of pollution and crime are also helping to draw wealthy people back to the centre of the cities. There is a chicken and egg argument about some of the causes and effects. In an impassioned speech last year against gentrification in Brooklyn, New York’s version of east London, the filmmaker Spike Lee implied that there might be a racial element to the allocation of resources: “Why does it take an influx of white New Yorkers for the facilities to get better?”
Another problem is rolling out the model beyond London. The flat white economy is driving fast growth in one small area, but is it replicable elsewhere? In some respects, America has been here already. Portland and Boston are two cities that experienced a version of the flat white economy before London did. In the wake of the dotcom boom of the early noughties, the writer and urban theorist Richard Florida wrote a book called The Rise of the Creative Class, in which he advocated a kind of proto-flat white economy, arguing that the American cities could insulate themselves from the changing shape of the economy by becoming attractive to creative young people. But as has become clear in a number of cities, the consumer end of a creative class – independent bookshops and zany tapas joints – tends to benefit only the creative class. Having these things without the driving force of real industries is risky.
McWilliams’s book focuses on online marketing and retail, which are expanding and profitable, although it sounds a cautionary note about the potential limits of these industries. He argues that the government needs to remove possible barriers to growth, which in London means building more houses and offices and making sure the trains run properly. This is beginning to happen: although you might not think it to read the headlines about first-time buyers, London’s housebuilding starts are at six times their historic average. McWilliams identifies 10 other British areas, including Leeds and Slough, where this kind of economy might take off, but warns that the capital will continue to dominate.
Cafe owner Nik Williamson at the ‘Porridge Cafe’ in Shoreditch Dan Kitwood/Getty Images Photograph: Dan Kitwood/Getty Images Back on Brick Lane, certainly, there was no sign of any slowdown. Three months after it opened, business at Cereal Killer is thriving. The cheerful staff, clad in black T-shirts, might have come from hipster central casting, but there was no doubting the sincerity of the joy being Instagrammed out by happy munchers. “At first it was nuts,” said Campbell, who has worked in the café since it opened. “There are still queues around the block at the weekend and we get some tourists, but there are also plenty of locals and even one or two regulars.” For £3 he poured me a “cocktail” called “Don’t Have a Cinna, Mon,” comprising Golden Grahams, Cinnamon Crunch and Apple Zings. It was tasty, although I felt about eight years old. “Finally, it is starting to feel like a normal business.”
Cereal Killer will not be the last hipster outlet to aggravate the general public. As this went to press, a Scandinavia-inspired porridge café opened less than half a mile away, offering 25 varieties priced at up to £7 a bowl. The hipsters may have the last laugh, and it could be good news for all of us. After this article went to press it emerged that Douglas McWilliams is also facing trial for allegedly assaulting a prostitute on New Year’s Eve. Follow the Observer Magazine on Twitter @ObsMagazine
The hipstersubculture typically consists of white millennials living in urban areas.[1][2] The subculture has been described as a "mutating, trans-Atlantic melting pot of styles, tastes and behavior"[3] and is broadly associated with indie and alternative music, a varied non-mainstream fashion sensibility (including vintage and thrift store-bought clothes), generally progressive political views, organic and artisanal foods, and alternative lifestyles.[4][5][6] Hipsters are typically described as affluent or middle class young Bohemians who reside in gentrifying neighborhoods.[7][8]
The term in its current usage first appeared in the 1990s and became particularly prominent in the 2010s,[9] being derived from the term used to describe earlier movements in the 1940s.[10] Members of the subculture typically do not self-identify as hipsters, and the word hipster is often used as a pejorative to describe someone who is pretentious,[11] overly trendy or effete.[7][12] Some analysts contend that the notion of the contemporary hipster is actually a myth created by marketing.[13]
In a Huffington Post article entitled "Who's a Hipster?", Julia Plevin argues that the "definition of 'hipster' remains opaque to anyone outside this self-proclaiming, highly-selective circle."[14] In Rob Horning's April 2009 article "The Death of the Hipster" in PopMatters, he states that the hipster might be the "embodiment of postmodernism as a spent force, revealing what happens when pastiche and irony exhaust themselves as aesthetics." In a New York Times editorial, Mark Greif states that the much-cited difficulty in analyzing the term stems from the fact that any attempt to do so provokes universal anxiety, since it "calls everyone's bluff".
Published: 10:42 GMT, 14 March 2015 | Updated: 10:42 GMT, 14 March 2015
A Chinese holidaymaker has been hit with a fine for washing her feet in a public bathroom on one of Thailand’s picturesque tourist islands.
The woman was spotted washing her feet in a sink less than 30 minutes after island officials posted a ‘no foot washing’ sign in the loo.
The warnings were posted in bathrooms on the island of Phi Phi Don a few days after a group of Chinese tourists upset locals by washing their feet and sandals in hand basins.
Koh Phi Phi-Nopparathara National Park Chief Chaithat Boonphupantanti told the Phuket Gazette: ‘She didn’t pay any attention to the sign directly in front of her.
‘Our officers took photos of her breaking the law before informing her that she was committing a crime.’
‘We were not rude or aggressive when we were dealing with the tourist. We are just trying to establish rules that will keep the place clean and beautiful.’
The relationship between Chinese tourists and Thai locals has become strained following a series of high-profile incidents that have led to stern warnings from the Chinese government and an etiquette guide being published by Thailand’s tourist board.
Earlier this week, photos that showed Chinese visitors washing their feet and sandals in public sinks in Phi Phi led to outrage, with locals insisting that the holidaymakers committed a cultural faux pas.
An island official told NetEase, a Chinese media agency, that the holidaymakers’ actions were ‘inappropriate’ and that notices would be posted in public bathrooms to discourage the behaviour.
Thailand is a popular destination for about four million Chinese tourists every year, but locals have expressed frustration and outrage in response to the actions of a handful of visitors.
Last month, Thailand’s tourist board announced that it would be handing out etiquette manuals to Chinese tourists who were visiting during the Chinese New Year.
The manuals outlined how the holidaymakers are expected to behave while they visit Thailand.
They were created after the Thai government received complaints from locals, who accused Chinese visitors of defecating in public, causing traffic accidents with reckless driving, and defacing tourist attractions.
Chinese tourists were temporarily banned from even entering Wat Rong Khun, the Buddhist White Temple in Chiang Rai, after complaints that they had ruined the toilets.
Bali provincial tourism office data revealed on Saturday that the number of tourists from India has increased by 47.52 percent in the first two months of the year to 17,400 people.“The significant increase of travelers from India is supported by good relations between India and Indonesia from the political, economic and cultural sectors,” tourism practitioner Made Sudana said in Denpasar, Bali, on Saturday as quoted by Antara news agency.Besides aggressive tourism marketing programs carried out by the government, he said Bali was the perfect place for Indians to visit since most people on Bali are Hindu, which is also the dominant religion in India.“Hinduism is a religion that is growing in India and Bali. The people from both places find spiritual and cultural connections through Hinduism,” he said.He added that many tourists from India were amazed by the development of Hinduism in Bali, including how this religion mixed beautifully with the local culture and arts, which was different from Hinduism in India.These uniqueness, he said, was the main attraction for Indian travelers. (nfo)(++++) - See more at: http://m.thejakartapost.com/news/2015/03/14/bali-sees-more-visitors-india.html#sthash.Dnzr8krp.LSTHGIm9.dpuf
Chinese descend on remote Palau as wanderlust deepens
AFP
March 16, 2015, 1:06 am
Koror (Palau) (AFP) - Chinese tourists are flocking to the remote Palau islands as China's growing number of rich seek new frontiers abroad, but not everyone in the Micronesian paradise is happy about it.
Strapped into life-jackets and screaming with excitement, groups of boisterous Chinese thrill-seekers tear around Palau's "Milky Way" lagoon on a flotilla of speedboats -- a spectacle unfamiliar to locals just a few months ago.
Residents of the archipelago, part of the larger island group of Micronesia, are baffled as to why Chinese travellers represented almost 62 percent of all visitors in February -- up from 16 percent in January 2014.
For businessman Du Chuang from Chengdu in China's Sichuan province, it is because his increasingly wealthy countrymen are becoming more adventurous, smashing the stereotype of the herded package tour.
Du first started to travel by visiting Hainan, the Chinese island in the South China Sea currently witnessing a massive development of hotel resorts. He then ventured to Thailand before branching out to the Maldives.
"The corals here are more beautiful than Sanya (on Hainan)," the 46-year-old told AFP, scrolling through photos on his phone of a $1,400 helicopter trip over Palau's Seventy Islands that he took his family on.
"Palau is small and magnificent," added the owner of a successful IT company.
Hoteliers are catching on, with some establishments focusing on Chinese clientele booked out months in advance. At "Sea Passion Hotel" in Koror, 74 of their 75 rooms were occupied by Chinese visitors when AFP visited.
On a beach Chinese women wearing full body suits to protect themselves from the sun pose for selfies with husbands and boyfriends in sleeveless vests, which they send to their friends back home in China's grey megacities.
- 'It's like paradise' -
Jia Yixin, a 30-year-old from Shanghai, didn't think twice about paying $1,133 (1,000 euros) for a six-day trip to Palau that she found online.
"It is like paradise here," she beamed. "In Shanghai the air is polluted but here people respect the environment," Jia added.
Ironically it is the potential environmental impact of the Chinese invasion that is at the forefront of the minds of many of the islands' 18,000 population.
Palau welcomed just shy of 141,000 visitors last year, up 34 percent on 2013, largely on the back of the Chinese visitors. But in February this year, mainland Chinese visitors leaped more than 500 percent year-on-year to 10,955 ?- more than half Palau's total population.
Tourism accounts for close to 85 percent of Palau's gross domestic product (GDP), and while profits are up, some are worried the long-term damage may be too great.
"This is a very sudden influx, so we are trying to understand the situation" said Nanae Singeo, managing director of the Palau Visitors Authority, the local tourist board.
"We have never experienced this much tourism before and the magnitude is really giving us a lot of pressure. We are a very tiny country with scarce resources so this sudden increase is an unknown challenge for us," she added.
Palau has long catered for a particular type of visitor, with up to 70 percent of tourists coming for world-famous diving in stunning blue waters with pristine corals.
Japanese were traditionally the largest contingent, followed by Taiwanese and Korean visitors. But the majority of the new wave of Chinese tourists seem more interested -- for now at least -- in lounging on the beach.
"We are not seeing a growth rate to match the number of visitors," said Singeo. "Tourists are up 34 percent so technically we should see economic benefits at the rate of 30 percent or more, but that's not the case."
- 'They wreck corals' -
On the streets of Koror, some accused Chinese people of being noisy and disrespectful towards the environment.
"They wreck corals and throw their rubbish in the sea," chided Norman, a taxi driver.
In another recent example, a Chinese tour operator named "Yellow Skin Tour" caused outrage in Palau with leaflets including photos of grinning Chinese tourists holding up turtles they had removed from the water -? in one case by its flippers.
Residents have also accused Chinese tourists of being responsible for the deaths of some jellyfish at the natural wonder "Jellyfish Lake".
Visitors are encouraged to marvel at the harmless creatures by floating on the surface, but some locals complain that many Chinese lack swimming skills and thrash around, disturbing the wildlife.
The Palau government is exploring ways to try to stem the tide of Chinese tourists to the western Pacific Ocean archipelago and this week said the number of charter flights from China would be halved next month.
President Tommy Remengesau said the move was not intended to discriminate against any nationality but was to prevent tourism from becoming too reliant on one market.
"Do we want to control growth or do we want growth to control us?" he asked reporters. "It will be irresponsible for me as a leader if this trend continues. I am not only looking at the present but, as a leader, I am looking after tomorrow."
But the number of hotels, restaurants and guides in Palau now catering for a Chinese market would suggest that citizens of the world's second-largest economy are likely to keep coming.
