Cambridge technology cluster is entering a new phase of high growth

Cambridge UK is the closest thing Europe has to the world’s two premier technology clusters of Silicon Valley and Cambridge Massachusetts, but in the past rather than growing and maturing, its start-up companies were likely to attract international buyers who moved the assets on. 

That has now changed, according to a new book by Charles Cotton, entrepreneur and founder of The Cambridge Phenomenon Ltd, a not for profit company he established in 2009 to celebrate and study 50 years of research translation and technology development and commercialisation in the city.

In the book, ‘The Cambridge Phenomenon: Global Impact’, Cotton argues that rather than coming to acquire companies and moving jobs and research into their existing businesses overseas, multinationals are now choosing to operate in the city.

Cotton says more than 30 global companies have bought local businesses and continued operations in the cluster.

“The misperception is that big multinationals swoop in, grab the best people and clear off,” Kate Kirk, co-author of the book told Science|Business. Big companies are no longer moving assets away from the area, and are choosing to spin in, rather than out.

“Instead of early-stage technology companies being bought up by overseas companies and taken away from Cambridge, we are now seeing multinational companies using acquisitions as a way of becoming part of the Cambridge ecosystem,” said Kirk. “These 'sticky acquisitions' are a major indication of Cambridge's success.”

One case in point is Amazon acquiring Evi, developer of a voice recognition personal assistant, run by entrepreneur William Tunstall-Pedoe.

Tunstall-Pedoe and his team became part of Amazon’s new European R&D lab headquartered in Cambridge and subsequently developed the new Amazon Echo, a voice-controlled hands-free speaker, and the Alexa software that powers it.

The e-commerce giant is now using Cambridge as a testing ground for its new drone delivery service.

Another example cited by Cotton is the decision of AstraZeneca plc to build a global R&D headquarters in Cambridge. The move was partly inspired by a desire to merge the company’s small molecule and biopharmaceutical research, but also as a route to access academic and clinical expertise in the city.

The focus for the move is AstraZeneca’s MedImmune arm, formerly Cambridge Antibody Technology, one of Europe’s pioneering 1990s biotechs, which was acquired by AstraZeneca in 2006.

“[AstraZeneca] was the first major global company that decided it wanted to come and stay here,” said Cotton. Astra Zeneca is due to move into its new £330 million global research lab in 2017.

Apple recently opened an office in Cambridge to work on a voice assistant. Google, which acquired Deep Mind, its artificial intelligence unit, from the area, has an office here too.

There are now around 1,000 technology and biotechnology companies in the Cambridge cluster, 1,400 when providers of services and support organisations are included. More than 40,000 people have come to, or stayed in, the Cambridge region to work in these companies.

Underestimated

It remains the case that Cambridge companies are less well known than Silicon Valley counterparts. “That’s because the majority offer business-to-business services. No one around here has started something which has made it into the common parlance, such as Google or Facebook,” Cotton said.

The companies deserve to be better appreciated. “People are using products made in Cambridge everyday – they just don’t know it,” said Cotton. A prime example is the microchips designed by Arm Holdings, which are found in more than 90 per cent of the smartphones in the world.

Cambridge also gave the world Concorde’s distinctive “droop” nose, Bluetooth on a chip, the Clear Blue pregnancy test and the UK’s first commercial internet provider, Pipex.

The foundation stone of Cambridge’s 50 years of success as a technology cluster is the university, which has acted like one big incubator, said Kirk. “It had a knock-on effect in the surrounding area.”

Cambridge University counts more billionaires among its alumni – as well as 91 affiliated Nobel prize winners – than any other outside the US.

Cambridge spirit

Cotton said that inside Cambridge there is a great will to share ideas and work together, something he refers to as the “Cambridge Spirit”.

“It may be a bit of mischaracterisation, but in Silicon Valley it’s how rich I can get, in Cambridge it’s how much good I can do,” said Cotton. “It’s an incredibly generous society here where everyone wants to help everyone else – that’s the underlying success.”