– “How do grow the perfect English lawn?”
-“Oh, it’s quite straightforward sir. You just cut it, roll it and water it for about 400 years.”
Old English joke
Being known for years as a Silicon Fen, an analogue of the Silicon Valley, the University of Cambridge has fully deserved its reputation of Europe’s top innovation ecosystem, “it is a bottom-up ecosystem that has developed over time and keeps feeding on itself”, as described by 345th Vice-Chancellor of Cambridge University, Professor Sir Leszek Borysiewicz.
Today there are around 1,500 technology companies in the region, some of which have become national and world market leaders. Giants like Microsoft, Toshiba and AstraZeneca has chosen to set up its major European research labs or locate its global R&D and corporate headquarters there.
No one has planned this prodigy, like no one planned Silicon Valley, it has developed organically from the highly synergetic “alloy” of knowledge and technology, which has grown and matured over years, shaping its own environment into what we know as the Cambridge Phenomenon today.
Cambridge has a rich history, which starts at prehistoric times and due to its geographic location the city historically served as an important regional trading post. Nowadays it is most known for Cambridge University and its demographic situation highly depends on the university terms. The university counts 8.500 employees, over 18.300 students and the University is ranked number 4 worldwide for its reputation by Times Higher Education World Ranking 2014-2015.
Cambridge University is in the heart of the Cambridge Innovation Cluster, which has evolved into one of the world’s most enterprising networks of people and technology, life sciences and service companies during the last 50 years. Three main innovative developments “gave birth” to the Cambridge Cluster:
The Edsac, one of the first general-purpose electronic computers was created in 1949 by Wilkes & Co in Mathematical Laboratory and was immediately available as a computing tool for Cambridge University in a range of disciplines. This had two effects: it led to a series of scientific breakthroughs (for example, plate tectonics in earth sciences) and it established Cambridge as a leader in information technology and computing.
Discovery of the structure of the DNA molecule by Watson and Crick in 1953, which led to the sequencing of the human genome in 2000. It established a Cambridge ecosystem of biotechnology companies.
Cambridge Consultants, one of the UK’s first technology-transfer companies was founded in 1960. Cambridge Consultants played a critical role, especially in IT ecosystem and are linked to many of today’s successful companies (for example ARM).
For a Cluster ecosystem to be sustainable it needs to have a significant research university at its heart. It has to be in a pleasant urban environment that has a good housing stock, reasonable transport links, good state and private schools, good healthcare and a lively cultural life. It’s important that the university at the heart of the ecosystem should be one that gives considerable freedom to its academics and has a liberal attitude towards intellectual property. Legal firms who understand IP are also required, and outposts of the global accounting and consulting firms because venture capitalists do not feel comfortable funding ventures, which are audited, by local firms. And there needs to be a range of different kinds of hotel – including boutique ones – to cater for visiting researchers, financiers and conference attendees.
The ecosystem needs a lot of small specialist firms that can quickly tackle specific commissions together with a networking system that enables people quickly to locate a particular specialist when they need them. Most important of all, it needs a significant population of “angel” investors. Cambridge has a club of such angel investors. Membership requirements include a net worth in excess of £15m and a track record of at least one successful “exit” from a startup. At present, the club has 56 members. The main reason of success is that once money is made on the angel’s investment, most of them “stay in the house” – are reinvest back in other startups, this approach allows the eco system to expand and flourish.
The Cambridge Cluster also benefits from meeting all the above conditions, which in major part explains the “Cambridge phenomenon”.
World-renowned start-ups, which were created in the University of Cambridge, include: Raspberry Pi, Solexa, Cambridge Display Technology, XenSource.
Twelve top companies, which have achieved 1 billion USD evaluation in the last 15 years are: Abcam, ARM, Autonomy, AVEVA, CAT, Chiroscience, CSR, Domino, Ionica, Marshall, Solexa, Virata. For example, Arm, which designed the chips that power more than 90 per cent of the world’s mobile phones, is worth 22bn USD. Other less known yet important interesting achievements include: Concorde’s “droop” nose, Clear Blue pregnancy tests, Wonderbra, and Bluetooth was put on the chip first time here as well as Pipex becoming the first commercial internet.
Talent attraction and retention is an important aspect of the Cambridge eco-system development. First, the reputation of Cambridge University itself acts like a magnet for the talents. The academic reputation of Cambridge University makes this place prestigious and supplies local companies with a rich pool of talents every year. Second, Cambridge is known as a start-up laboratory where start-up failures are “tolerated” as young people easy find employment in established companies and the Cambridge job market is considered one of the most flexible job markets in the technology sector.
The third aspect of attraction is the high degree of ‘networking’, enabling people across the region to find partners, jobs, funding, and know-how.
Cambridgeshire County Council has special programs to help with employment of young people and offers advice, career service, further training allocation. Apprenticeships are available in a wide range of industry sectors with employers from large national companies to smaller local companies.
Already Alfred Marshall, author of Principles of Economics and not surprisingly the Cambridge graduate, observed many years ago that workers in skilled occupations tend to cluster in areas where their peers live and work. Employees are willing to move to an area that promises a future beyond any one company.
But there is the other side of the coin. The disposable income of increasing young Cambridge working population is growing (Cambridge has the fastest population growth rate in UK in 2014) and there is a significant shortage of house and office space, which raises the prices within and around the city area. The population growth makes a significant effect on the local transport infrastructure, which is overloaded, CO2 emission level twice exceeds level in the European university cities of the same size like Leiden and Leuven, average one way trip with commuting transport takes almost twice much time than in Leuven (26 min vs 17 min respectively) and car is still the most common transport choice for getting to work, which creates traffic congestion. These aspects negatively affect the quality of life, and there is a danger that major companies would leave the city unless something is done to improve the existing situation.
Locals don’t underestimate the importance of negative outcome. Cambridge Futures, a local initiative non-profit group of business leaders, politicians, government officers, professionals, and academics are working on possible alternatives for the future of the Cambridge Sub-Region. The Group has prepared the Draft Structure Plan, which proposes the building of 42,000 new homes by 2016, and the creation of about 50,000 new jobs.
Cambridge Cluster has strong state and private business support. In 2014 UK government decided to invest £7 billion (9.45 billion EUR) in science, lauding the Cambridge innovation cluster for producing some of nation’s most important scientific and commercial successes. This funding, the biggest sustained programme of investment in new science capital, will be phased in annually, ending in 2020/21. Part of these investments will be used to resolve the above problems caused by population growth which will make Cambridge even more attractive and successful.