Friday, November 13, 2009

What's the future for Silicon Fen?

This article appeared in the 'finalword' section of Cambridge Business magazine, Q4, 2009

Tim Minshall, Institute for Manufacturing and St John's Innovation Centre

Trying to work out how the high-tech cluster in Cambridge is performing is very frustrating. You end up having a lot of sympathy for Harry S Truman’s famous quote: “Give me a one-handed economist! All my economists say, 'on the one hand...on the other”. You get a flavour of this scanning headlines over recent months: “Abcam reaches new heights with record interims”, “Bankruptcy levels reach record high [..]”, “Recession is over, let's get back to business”, "3i to shut Cambridge office", "University of Cambridge portfolio companies raise more than £30 million [..]", “Life sciences cluster takes further blow”, and so on.

Whatever the often contradictory headlines say, the Technopole – or ‘Silicon Fen’ – seems to be reaching an important point in its evolution. Since the 1970s, Cambridge has been one of the leaders in the development of support for new technology-based ventures. It has not been the biggest, or the most successful (Cambridge is, as some have observed, a seagull compared to Silicon Valley’s Jumbo Jet), but it has created a particular model of value creation that has delivered significant value to the UK economy and to global investors.

However, almost every developed nation has recognised the potential economic benefits of technology-based entrepreneurship and has sought to create their own version of Silicon Valley. The result is that Cambridge has found it harder to attract international investment, and domestically there has been rapid growth in regional competition. In addition three other factors bring in to focus the challenges – and opportunities – facing Cambridge: the effect of the global economic downturn; the reaching of major milestones for key Cambridge organisations; and changes in several key organisations within the cluster coupled with the launch of many new initiatives.

The credit crunch has clearly had a significant impact on Cambridge companies, but this impact has both a negative and positive side. For some companies, the financial crisis resulted in problems accessing debt and equity finance, and in much harsher market conditions as customers reined-in their spending. However, other companies have found opportunities to grow in the downturn – such as the enterprise search company Autonomy – and yet others have been able to raise significant investment – such as Light Blue Optics. The downturn has also led to the departure of some big names from Cambridge such as Kodak, but also seen the arrival of new ones in the shape of electronics giant Philips which opened a research centre in the city.

Cambridge is the birthplace of many remarkable organisations that have played key roles in the Cambridge Phenomenon. Some of these organisations are approaching significant milestones, such as Cambridge Consultants (a pioneer in the field of technology and innovation consultancy) approaching its 50th birthday, and the Cambridge Science Park (at the vanguard of science park developments since the 1970s) its 40th. But how do we build upon the achievements of these and similar organisations? Which organisations will be the ones to raise Cambridge’s game to the next level and keep us at the forefront of activities to create and capture value from innovation?

As well as remarkable organisations, Cambridge has many outstanding individuals. What has been interesting to observe is the number of recent leadership handovers at key organisations including the Cambridge Network, ERBI and St John’s Innovation Centre. There has also been a regular sprouting of new, exciting initiatives such as the Hauser Forum, Women 4 Technology, and Cambridge Tech Demo nights.

Taking all of these issues together, Cambridge has some great opportunities ahead but must also overcome some substantial challenges. But which of these we should address, and how, is completely up in the air. I believe there are three areas where work is needed

First of all, we need to be better at reaching out internationally. Cambridge has a golden opportunity to help multinational corporations implement the increasingly popular strategy of ‘open innovation’ (i.e., combining internal and external ideas to create new value). It is fantastic to see companies such as Philips, Nokia and Unilever explicitly linking their open innovation strategies to activities at Cambridge. But we must help such firms ensure that they really benefit from being in Cambridge. And it’s not easy, as the departure of Kodak shows.

Secondly, there is great potential to do more to link activities and capabilities within Cambridge to those across the region to deliver value to new and existing businesses. The establishment of the Hauser Forum at West Cambridge as an EEDA-funded Regional Centre for Enterprise and Open Innovation, and the development of the Regional Technopole activities under the stewardship of Walter Herriot will both help support more regional collaborations. But creating and capturing value from innovation activities at a regional level brings its own challenges. Regional activities need to focus on complementarity rather than competition. Without this, there is a risk of duplication of effort and a dilution of resources across too many similar initiatives. Also, sharing experience and transferring skills between centres within the region takes time, money and sustained effort.

Finally, with so much happening within Cambridge, there is a real risk of initiatives treading on each other’s toes, and opportunities falling between gaps. Now here is a real challenge: Cambridge has, thankfully, never done ‘command and control’. Much of its strength is the result of highly individualistic, anti-authoritarian, entrepreneurial behaviour, and we don’t want to lose that. But we do need to improve internal links. As I write this, I am in Japan hearing how Japanese science cities (yes, cities, not parks) struggle to build links and foster collaborations to support the ‘soft’ infrastructure of innovation. Cambridge is in many ways well ahead of the game with its active business networking, free flow of students and researchers between university departments and companies, and numerous business support activities. But there is definitely more that could be done.

If we could build upon some of the excellent networks and collaborations that are already in place, and do even more to integrate new and old, technology and arts, university and business, it could really make a difference. One senior manager of a multinational highlighted this gap. He pointed out that while his company had benefitted from many of the networks and collaborations in Cambridge, he felt it was still very fragmented and this was likely to impact future investments. As he put it “It’s simple: if you want to attract more companies like us, you’ve got to join things up better!”.

Cambridge has weathered storms before. It could be that this storm is actually the trigger for the acceleration of the development of Cambridge as a globally leading source of solutions to tomorrow’s problems.