Is Cambridge one of the UK’s foremost business ecosystems?
In each edition of Business Leader Magazine, we profile one of the UK’s leading business destinations – in our last edition we focused on Cambridge. Through its role as a mecca for the world’s educational elite, its relentless drive to innovate new technology, and its proximity to the capital, have all made it an attractive proposition for businesses and entrepreneurs.
To learn more about the city and the region, Business Leader spoke to some of the area’s key figures to learn more about what is driving Cambridge’s business community and its future ambitions.
Why is Cambridge a good place to have a business?
Eddie Latham, Director and Co-Founder of online retailer Velocity Commerce, said: “Cambridge has always benefitted from the prestige of the university but more recently it has gained an international reputation as a world leader in technology and life sciences. As a tech-based company, being part of a business community, which has such a strong reputation for being on the cutting-edge, continues to be beneficial.
“As an online retailer, we have always been data-centric and data-driven, focussed on understanding the science behind consumer behaviour. This technology-based and analytical foundation has helped to cement ourselves within the Cambridge cluster and associate our business with the reputation for excellence which Cambridge has.”
Bruno Cotta, Executive Director of the Entrepreneurship Centre at Cambridge Judge Business School, comments: “Cambridge is one of the most innovative and enterprising places on the planet, whether your business is starting, scaling or steady state.
“The region surrounding an 800 years old, world-leading University, is home to over 5,000 knowledge intensive companies, employing over 60,000 people, which last year generated over £15bn of turnover.
“It’s a unique ecosystem that means you’re never far away from the emerging talent, technology, or capital that every business needs to survive and succeed, today and in the future.”
Tamsin Eastwood, Partner in law firm Stone King’s Corporate and Commercial team, said: “As well as the various large global businesses with a base in Cambridge (including AstraZeneca and Microsoft), it has a high proportion of tech businesses across the spectrum. They are agile in the development and application of their products and how they are financed and operate and can readily adapt to the new economic circumstances.
“Overall, Cambridge is a hub of creativity, research and knowledge. The incredibly skilled and qualified workforce is also an attraction to businesses.”
Jane Paterson-Todd, CEO of Cambridge Ahead, a business and academic membership organisation dedicated to the successful growth of Cambridge and its region, comments: “Within the universities, research institutes, commercial research and development centres, individual organisations and start-ups, teams are always working to push back the boundaries of knowledge.
“This culture of knowledge discovery comes with a shared confidence to tackle and solve global challenges. Innovating to change the world is in the DNA of the scientists, business leaders and investors in Cambridge, which in turn attracts great minds, capital and support from further afield to enable and share in our success.”
What could Cambridge do better as a business destination?
Latham: “As much as the excellent reputation of Cambridge is valuable from a business perspective, it translates into high property costs and ground rents.
“The stunning historical architecture and road networks which have been built up since the 16th Century mean that, although beautiful, city centre space is at an all-time premium. To counteract this, business districts have sprung up around the outskirts of the city and the public transport and road networks are always running to keep up.
“Because our business is so multi-faceted, requiring both warehouse and office space, we’ve recently expanded our premises to be multi-site, with warehouse space farther away from the city centre and our head office closer in.”
Paterson-Todd: “Housing costs are increasingly prohibitive and as such many people find themselves priced out of the market and as a result forced to move further afield in order to afford suitable accommodation. Cambridge’s cost of housing is at least 13 times the average salary, on par with London costs. Subsequently, increasing number of employees are commuting longer distances to access their place of work.”
Eastwood: “Arguably, the high proportion of overseas students which will now be substantially reduced. This applies not just to the two universities but also several other educational institutions with the knock-on consequences for other local businesses. Some scientists see more opportunities for development and investment in the US and in Europe whilst post-Brexit uncertainty exists.”
Does Cambridge benefit – or get held back by – its geographical location?
Paterson-Todd: “Cambridge is well-positioned both geographically and within the sectors in which it operates, connecting closely with London as the southern corridor – appropriately known as the ‘Innovation Corridor’ – with many high-tech, knowledge-based companies dominating both ends of the corridor.
“The ‘Golden Triangle’ of London, Cambridge and Oxford is the focal point of government attention, with strong evidence emerging that would support longer term growth outwards towards the East from Oxford and West of Cambridge, over to Milton Keynes.”
Peter Cowley, a serial entrepreneur and angel investor, said: “The city has good transport links to the South towards London (45 minutes by rail), to Stansted Airport (30 minutes by car) and Luton/Heathrow Airports (60-90 minutes by car).
“However, there are poor public transport links to the North and West – it is actually much quicker to travel to Oxford via London, then direct! The new A14 opened earlier this year to Peterborough has improved the road connection, but is still slow by rail.”
Latham: “Although it’s not the easiest to travel from one side of the city centre to the other by car, being in Cambridge gives us easy access to London, where a number of our clients and partners are based.
“We also work a lot internationally and travel to trade shows and events all over the world, so Stansted Airport being nearby is definitely a bonus for us. From the logistics side of our business, we can also access some of the UK’s major docks easily which helps with our imports.”
What are the major challenges facing Cambridge?
Paterson-Todd: “The current economic climate, brought on by the COVID-19 pandemic is naturally a major challenge. Whilst Cambridge is not immune to the risks of a downturn, it has shown its resilience to past recessions, most notably in 2008-9. Whilst respecting that the impact from recessions will vary according to their causes, at this particular time Cambridge’s expertise and success in sectors such as life sciences and IT is central to the needs of the national economy.
“The call on life science and pharmaceutical companies to find and develop tests and vaccines for the virus is of national importance too – and Cambridge is a key player.”
Cowley: “House prices and infrastructure are large challenges for Cambridge. The roads are based around medieval buildings which limits public transport, and this means the housing near the centre is very expensive.
“Public transport issues are being addressed by the potential of a metro system in the city, although that will take many years to become a reality – if at all. Various initiatives including Cambridge Network and Cambridge Ahead are working with local and central government to plan Cambridge’s growth.”
Latham: “COVID-19 has had a significant impact in Cambridge, as it has done everywhere, both on the community and on businesses. However, in the face of all the worry and uncertainty the community has also shown incredible resilience and ingenuity and I think it’s that mind-set that will take us through to the other side. So many businesses pivoted to a completely different way of operating within a matter of days when we first went into lockdown, and everywhere people began using technology to stay connected with each other.
“Every week during lockdown it seemed that one of Cambridge’s independent restaurants or shops was finding a new way of offering a service to the community.”
What future developments are planned and how will they impact the area?
Eastwood: “There is an enormous amount of development that is still going on, particularly the North West Cambridge development, with Eddington comprising the first phase with 1,400 homes for university staff and for the wider market – including 325 postgraduate student rooms, retail and sports facilities and other amenities. Eventual plans are for 3,000 homes, accommodation for 2,000 postgraduate students and one million square feet for research facilities. Plus, potential redevelopment of Cambridge Airport which could ultimately provide 12,000 homes and five million square feet for business and commercial space.”
Latham: “Business developments in Cambridge are in perpetual motion. In the immediate future for Cambridge is AstraZeneca’s new £500m-plus global headquarters and R&D centre, under construction on Cambridge Biomedical Campus, which brings with it a new train station and coincides with a commitment by Homes England to deliver 6,500 new homes in the surrounding area.
“The great thing about the developments is that they bring interest from the wider world, people want to live and work in Cambridge and it cements it’s place on the map as a centre of business excellence which we can use to our advantage.”
What sectors are most important for Cambridge and why?
Cotta: “From a vantage point in the university, it’s been knowledge intensive services, information and communication technology, high-tech manufacturing and health and life sciences, where Cambridge companies have been instrumental in driving innovation and generating economic and social impact within and well beyond the UK.
“Looking ahead, we are again leading the way, with a new generation of entrepreneurs exploring significant multi-disciplinary advances across the sciences, engineering and medicine, with world-leading capability in artificial intelligence and machine learning now being applied across sectors, to address many of the pressing challenges we face in managing our health, energy, security and the environment.”
Cowley: “Traditionally electronics (encompassing software, sensing, cleantech, machine learning and robotics), but there has been a huge upsurge in life sciences over the last decade. These sectors have been driven by university research and by people who either graduate from the university or move into the area for work.”
Latham: “As well as life sciences, Cambridge is a heartland for technology businesses, and has been since the start of the Cambridge cluster in late 1970s. Today, the big names like Arm, Apple, Amazon, Solexa and Frontier have their global headquarters in Cambridge, creating the perfect environment to operate side by side with small break-out start-ups, that grow quickly because of access to some of the world’s leading venture capital firms and an extremely prestigious recruitment pool.
“However, ultimately what makes Cambridge, Cambridge, isn’t linked to a particular sector or industry. Innovation and ingenuity are the common thread between every business that succeeds here, and Cambridge is always topping the league tables for the number of patents filed, or start-ups registered per capita across the whole of the UK.
“It’s this level of ingenuity and innovation which we really value in our team and put at the core of our business and it’s why we would choose to be here over anywhere else.”