Business Review: Focus - Welcome to Silicon Beach

FOR JOHN Worth, the decision to move to Brighton was a case of simple economics. In 1993, his first child had just been born and he wanted to set up his own business. But the cost of family life in London is daunting.

He saw abandoning the south-west London suburb of Putney for the south coast as a natural move because "Brighton always had an interactive community", just the right place for an independent producer moving from film and television to then-embryonic interactive publishing.

The media has long loomed large in the seaside town's life. Some of the earliest British films were made in Hove, and its proximity to London has made it a popular haven for writers, journalists and television and film specialists.

Once, much of that knowledge got on the train to Victoria. Now it is walking, cycling or driving to work in one of the cottage industries peppering the side streets of Brighton and nearby towns.

One of the first companies of the "new economy" was Victoria Real, an Emmy award-winning production firm also active in e-commerce and web design. Now there are 300 companies in various branches of media - from television production and CD-Rom publishing to website design - employing 3,000 people with total revenues of pounds 300m.

Such figures do not put it on a par with the collection of more than 1,000 high-tech industries employing about 37,000 people that has made Cambridgeshire "Silicon Fen", or Britain's answer to California's Silicon Valley. But "Silicon Beach" is a significant enough cluster to have attracted the attention of the Department of Trade and Industry when it was preparing the competitiveness White Paper early in the Government's life.

Anna Pedroza, of Wired Sussex, the economic development agency subsidiary of Sussex Enterprise that has played an important role in developing this mini-industry, says coastal towns as far away as Littlehampton and Chichester also have pockets of new-media activity. There is also a concentration in Crawley.

A recent study for the South East Media Forum concluded that the Sussex cluster sat at the heart of a powerful media industry covering a great swathe of the south and south-east outside London. This industry was said to be worth just under pounds 4bn, employ 32,000 people and to have grown nearly 20 per cent in the past year.

But there is no denying Brighton is the centre of it all. The influx of talent and money has transformed what just a few years ago was a decaying resort into a bustling and self-confident commercial district.

Mr Worth's JWM Creative, a company that has grown in six years to become a leader in developing training materials for the health sector, houses its 12 full-time employees in a nondescript building that forms half of the Brighton Media Centre. It houses 30 similarly-sized companies in various aspects of media, from multimedia training to website design and video production. And in the same street between the sea and the increasingly booming shopping centre is the office of DJ/pop star Fatboy Slim's record company, and many other television personalities are reportedly on the look-out for properties.

But it is not just outsiders moving in. Many people begin their careers in the area after leaving Brighton or Sussex University or one of the colleges of further education close by. These academic institutions have either directly or through the Sussex Innovation Centre often provided the seeds for entrepreneurial businesses.

That is what happened with Maxim Training, at 22 years old, one of the longer-established businesses and, with 56 people and turnover of pounds 3m, one of the bigger ones. The founders Terry Walker and Chris Brand originally developed business games and other simulations while teaching management at Brighton University and saw a market for these and materials aimed at teaching business people "soft skills".

It gradually moved to offering this sort of training via CD-Roms and other forms of technology. Now the company is trying to stretch the technology to the limit to satisfy the demands of its blue-chip client base for up-to-the-minute training materials.

"We had to get a different sort of people," says Geri Lambert, the company's sales and marketing director. The Brighton location suddenly acquired a new significance because of the great numbers of suitably qualified job candidates emerging from the local educational establishments.

"We have a pool of labour here," says Ms Lambert. The combination of the development of the cluster and the trend to shorter employment contracts is creating a shifting group of skilled personnel who can take their expertise from company to company.

Another business with little trouble attracting the people it needs is Communicopia, a multimedia company that has a contract to supply a financial channel for digital television. They have to establish a studio on the edge of the City of London and increase the workforce from 24 to more than 100. But the leadership of the company set up six years ago sees no reason to move from Hove.

Gavin McWhirter, the business development manager, swapped a hour-each- way commute in London for a 12-minute walk from home to office when he joined the company a year ago. He says clients, who can get to Brighton by train in less time than it takes to cross London, like visiting them. Debi Jones, the account director, says: "It's half the price of sitting in Soho and we can have fish and chips on the beach."

A key challenge for some of these businesses is to achieve sufficient scale to compete nationally and internationally. One that looks set to do that is RealCall, in nearby Shoreham which is attracting attention because of their development that makes it easier for companies to respond to callers to their Internet advertisements.

The new media market is highly fragmented. Companies of the size of JWM are typical, and many are little more than one-man bands.

Wired Sussex Sussex is given a lot of the credit for assisting with marketing and promotion. It helps to organise trade fairs, arranges seminars, and helps with recruitment. Earlier this year it set up a meeting between entrepreneurs and financiers, ranging from business angels to fully-fledged venture capitalists.

Wired's Ms Pedroza is proud of the role her organisation played in bringing Maxim and two rival interactive training providers, Epic and Futuremedia, together in a new partnership called the Strata Consortium to bid for large contracts.

But much of Brighton's new-found success is down to hard-to-quantify factors such as the feel of the place and what Ms Pedroza calls the "sticky factor", that makes talented people want to stay.

As far as John Worth and his family are concerned they have made the right move. But not all of the big city life is quite so bad - that's probably why Mr Worth smiles when he says Brighton has the potential to be Soho-by-the-Sea.