1. The Cambridge Phenomenon:
an example of a local innovation system
“The Road from R & D to Commercialization – Better Productivity Better Jobs”
Chris Green, Chief Executive, SQW Group
20th June 2013

2. 1
Structure of presentation
 Context
 Historical development of the high tech cluster
 Characteristics of the Cambridge innovation system
 Is the cluster planned or market led?
 Future prospects
 Lessons for other places

3. The context
 Cambridge sub region –
792,000 population – 11.5%
growth 2001-11, 40% growth
since 1960s
 Greatly improved
connectivity, along with
increased congestion
 Cambridge’s service centre
role has expanded hugely –
retail, leisure, business
services, etc – part
population driven, part
development from local to
regional role
2

4. Historical development of the high tech cluster
Over the last 50 years, the Cambridge Cluster has
developed through several eras:
 1960-1985: the silent and “un-hyped” evolution of the boffin-cum-
entrepreneur
 1985-1995: increasing international profile and growth
 1995-2002: dot.com boom and “Cambridge is full”
 2003-2008: the new Spatial Plan and the Growth Agenda:
investing for substantial growth
 2008-2013: local growth in the face of national recession
3

5. Intellectual Capital
Higher Education
Research Institutions
[Strategic Alliances]
[Informed Networks]
Land, property, infrastructure
Locations affordable housing
Flexibility
Cost
Congestion
Environment
Services
Leisure
People
Education
Training
Entrepreneurship
Culture (international?)
Trust
IPR
In migration
Science Parks, etc
Choice or Frustration
Knowledge
Transfer
Spin-
outs
Inward
investors
Start-
ups
Existing
firms
Money and External
Business Expertise
Banks
Venture Capital
Angels
Accountants
Lawyers
Marketing Experts
Firms and
Sectors
Job Satisfaction
Local Politics
Housing
Travel to Work
Quality of Life
Local UK Global

6. Characteristics of the innovation system -
firms
 In 1984 there were 260 high tech firms employing 13,700 people
 main sector focus was electronics, instrument engineering, software and
technical consultancy
 By 2008 there were 1,400 high tech firms employing 48,000
employees
 sector focus was increasingly diverse, with particularly rapid growth in
biotech, software and telecoms
 69% of high tech jobs in the service sector, 31% in manufacturing
 Cambridge remains primarily a small firms cluster, although more of
the growth and opportunity is being driven by international owners
with their own perspectives on the future role of Cambridge
 Different business models
 more commercialisation through licencing
 more soft starts
 a renewed focus on manufacturing
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7. 6
Characteristics of the innovation system –
the research infrastructure
 Cambridge University is outstanding:
 THE 2012/13 ranked 7th in World overall, 5th in engineering and
technology, 2nd in life sciences, 6th in physical sciences
 And it has also had a permissive attitude towards IP and a positive
attitude towards commercialisation
 There are various national research institutes located in and around
the city. For example:
 The Medical Research Council’s Laboratory of Molecular Biology
 The Genome Campus – Wellcome Trust Sanger Institute
 Babraham Research Institute
 Cancer Research UK Cambridge Institute
 National institute of Agricultural Botany
 And various multinationals have located research facilities in
Cambridge, including Microsoft, Pfizer, Rolls
Royce, Schlumberger, Toshiba

8. Characteristics of the innovation system –
funding and specialist services
 Funding technology businesses is difficult everywhere
 The financial crisis has reduced the availability of loans and equity
investment
 VC has declined dramatically, and has a poor track record in the high
tech sector over the last 10 years
 However, Cambridge has a strong network of experienced business
angels, and an improving quality of investment opportunities as
entrepreneurs also become more experienced
 The technical consultants are an important part of the cluster
 Unique concentration in Cambridge area
 Important originators of smart ideas with immediate commercial
potential
 Increasing importance of links with London for funding, and
for specialist services
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9. Characteristics of the innovation system –
people
 Working population is highly qualified
 37% with degree level qualifications (UK average 32%)
 High rate of business start ups – 40% above UK average
 Entrepreneurship
 Cambridge University Entrepreneurs Society – very active
 Centre for Entrepreneurial Learning at Judge Business School
 Good awareness of entrepreneurship in local schools
 Stimulated by local success stories
 Strong local networks
 Private sector led
 Constantly changing and developing, informal and formal
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10. Characteristics of the innovation system –
the physical infrastructure
 Cambridge Science Park established 1970 – now home
to 100 companies and 1,650,000 sq ft of buildings
 Other specialist property followed – by the University and
Colleges
 St Johns Innovation Park
 Peterhouse Techology Park
 West Cambridge Research area, including the Hauser Centre
 And by the private sector
 Granta Park
 Cambridge Research Park
 Cambridge Biomedical Campus at Addenbrookes
 In total – 5m sq ft of specialist property, and 5m more in
the pipeline
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11. Planned or market led? (1)
 Much of the growth of the Cambridge cluster was due to
serendipity (e.g. CU’s relaxed attitude to IP), and was
not planned, and
 In some cases, public policy has been unhelpful
 Up to 2004, attempts to disperse high tech growth to places firms
didn’t want to be
 Failure to keep up with infrastructure demands
 Current difficulties in getting visas for international recruits
 But…..
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12. Planned or market led? (2)
 Government research funding underpins the strength of
Cambridge University and most of the research institutes
 The basic infrastructure was crucial
 Government funded – M11, A14, rail improvements
 College funded – Cambridge Science Park, St John’s Innovation
Park, Peterhouse Technology Park
 Strategic planning has become much more coherent and
supportive of housing and employment growth….and this
has meant the Government has been more generous
with funding for new infrastucture than in many places
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13. Future prospects
 The key components of a dynamic cluster are in place
 World class research and technology
 Long term expansion of CU is assured
 Strong firms, experienced entrepreneurs
 Expertise and funding to support growth
 Specialist property provision
 Public policy commitment to growth
 Investment by global high tech firms -
Microsoft, Pfizer, Astra Zeneca - suggests that
Cambridge is doing a lot right
 Future is increasingly linked to London and the golden
triangle
 Big question is whether commitment to, and funding
for, growth will be maintained.
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14. Lessons for elsewhere
 Cambridge is unique, but….
 It has exploited its assets very well – better, for example,
than Oxford
 And it has developed the supporting infrastructure to
enable high tech firms to form and grow
 “Cambridge is a low risk place to do high risk things” – Andy
Richards
 But it (along with the rest of UK) is increasingly
dependent on London
 Too much of the UK’s high level financial, business and
professional services capacity is based in London
 And the private rather than public sector has been the
main driving force for the success of the high tech cluster
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15. 14
Contact
Chris Green
Chief Executive
SQW Group
t. +44 20 7391 4100
e. cgreen@sqwgroup.co.uk
w. www.sqwgroup.com