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Cambridge Cluster
Brief for Les Echos
August 2011
Les Echos asked leading economics research firm, SQW, to provide a brief on the Cambridge Cluster. Director, Christine Doel, summarises recent evidence more information is available at: www.sqw.co.uk
Apart from Autonomy and ARM, what are the most famous companies? What do they do? The Cambridge cluster has developed many well-known high-tech companies. Technology consultancies have played a key role in this process. For example, Cambridge Consultants was launched in 1960 by a group of newly graduated scientists and engineers. Today it remains a major part of the high tech cluster and it is based on Cambridge Science Park. Since it was formed, it has spun out a number of firms which have grown to become sizeable businesses. These include: Domino Printing formed in 1978 and now with a worldwide turnover of 256m Xaar formed in 1990 and focusing on inkjet printing Cambridge Silicon Radio (CSR) formed in 1999. It is still headquarted in Cambridge and it now has over 1500 employees working in offices in the UK, the US, Taiwan, Japan, China, Korea, India, Denmark and France.
Cambridge is famous for its "Cambridge Cluster": Is it the busiest area of biotech and high tech companies in the UK? The Cambridge area is very important in terms of UK biotech and high tech activity. The areas science base (in terms of universities and research institutions) is of international importance. Over the last decade there has been significant investment from the University of Cambridge, UK Research Councils and major medical charities. In terms of specific developments, the University of Cambridge has invested in new facilities at West Cambridge; the Cambridge Biomedical Campus (in the south of the city) has been created; and there has been expansion at Babraham. Many of the areas biotech and high tech companies have important links into the research base. Some of these companies are spin-outs from either the University or the research institutions. Within the UK, the busiest area however is London. London is a genuine world-city and as a place, it is much bigger than Cambridge. London has large numbers of high profile universities and research institutions, and many biotech and high tech businesses have been formed in and around London. Cambridge and London are only about 45-60 minutes apart by train. There are increasingly strong inter-connections between the two high tech communities (including through commuting, shared networks, etc.). What is its output? How does it compare to other clusters? How many companies are there? How many employees? It is very difficult to measure the size of the Cambridge Cluster! The most recent data suggest that there are about 1,400 high tech firms in the Cambridge area and that these employ about 48,000 people. Over the last 25 years, the high tech community has grown very significantly (see overleaf).
Other high profile Cambridge companies include: Abcam plc, a producer and distributor of high quality antibodies, was formed in 1998 and now has a turnover in excess of 60m Redgate, a software firm, was formed in 1999 and now employs around 200 people Jagex, a computer games company, was formed in 1999 and is now the UKs largest independent developer and publisher of online games
In addition, Owlstone, Cambridge Temperature Concepts, Light Blue Optics and Horizon Drug Discovery feature within the portfolio of rapidly growing emerging companies. How did it start? (I think it was in the 70's) Why did it take off? It is very difficult to pinpoint the start of the Cambridge cluster. Key dates in its history include: 1960 the year in which Cambridge Consultants was formed 1969 the year in which the Mott report was published. This concluded that it would be strongly in the combined and separate interests of the county, city and University of Cambridge to encourage a limited growth of existing and new science-based industry in and near Cambridge. It recommended that ways be found of creating a science park in the Cambridge area
1970 the year that Trinity College decided to establish Cambridge Science Park. The Science Park was developed in phases and the first tenant moved in in 1973. Today Cambridge Science Park is home to over 100 companies and 1,650,000 sq ft of buildings
There are many different reasons why the Cambridge cluster has grown. Key factors include a positive approach from the University of Cambridge and, particularly in the more recent past, from the local authorities. Beyond that, the cluster has grown because it does, literally, work as a cluster. In SQWs own recent research, we were told that Cambridge is a place where people go out of their way to be helpful. For new, high tech businesses, informal advice and support from others in the high tech community is very important. In addition, networks of angel investors have grown up, particularly over the last decade. What headwinds is this area facing right now? Cambridge like everywhere else will be affected by the global economic situation. More locally, there are continuing pressures in terms of investment in housing and infrastructure. Plans to widen the A14 (dual carriageway) were abandoned in the context of central government spending cuts, and for many businesses in the Cambridge area, this is a concern. However the Cambridge area has seen important investment recently, and this ought to be significant in relation to the clusters future growth. The development of the Cambridge Biomedical Campus in the south of the city is especially important; it ought to strengthen the position of Cambridge as an international centre for biomedical research After much delay, the Cambridgeshire Guided Busway has also opened over recent weeks: this links villages and towns to the north of the city with Cambridge Science Park, Cambridge station and the Cambridge Biomedical Campus. Its purpose is to relieve congestion in the context of further planned housing and economic growth. Is the fact that Autonomy is being taken over by HP ruffling some feathers? The phenomenon of companies being born in Cambridge, growing to a certain size, and then being acquired has generated much comment for some time. Over recent years, it has been a particular feature of the biotechnology sector. Particularly within this sector, the concern is that Cambridge is perceived as a research and development laboratory for the global pharmaceuticals sector. While this may have benefits (e.g. a trade sale may lead to greater investment in R&D in Cambridge, as happened with Cambridge Antibody Technology), it means that Cambridge risks being seen as peripheral to the corporate headquarters, where the big decisions for the future are made.
For more information: Contact Christine Doel, Director, Tel: +44 (0) 1223 209400, Email: cdoel@sqw.co.uk SQWs full Viewpoint on the Cambridge Cluster is available at: www.sqw.co.uk