Sunday, February 15, 2015

AlertMe and British Gas: Glass half full?

CC: Bart Cayusa

At the end of last week, British Gas (BG) announced that it was going to acquire the Cambridge 'smart home' start-up, AlertMe, for £65m ($100m).  BG had been an investor in AlertMe since 2010, and had been using the start-up's technology in its Hive offering, but this acquisition now "sets up British Gas to become a much broader player in the burgeoning smart home space".
Putting this in the context of what this means for Cambridge, the debate is likely to split along two lines of argument: 'Oh no, not again' and 'This is great!'
The 'Oh no, not again' camp will talk about what a shame it is that another Cambridge start-up has been unable to remain independent and has had to be acquired (adding to the long list of sales that include Neul (to Huawei), TTPCom (to Motorola), CSR (to Qualcomm), CAT (to AstraZeneca), Autonomy (to HP), and many more). They will ask why so few of the Cambridge start-ups can be as successful at scaling as ARM, AbCam or Domino

On the other the 'This is great!' commentators will talk about how this deal will allow AlertMe's technology to be scaled using the vast resources of BG and its parent Centrica. It also sends another strong signal that Cambridge as a whole is great incubator for the commercialisation of technologies that can have major impact. This will support on going investment from funds and large companies seeking to help create and capture value from the 'open innovation ecosystem' that this region has become. 

But some might also refer to a report on the growth strategy for Massachusetts which famously stated that: “[..] we run the risk of turning into Cambridge, England: we’ll have isolated clusters of the very best university research and a number of small R&D firms but not the downstream production, service and support jobs that make a vibrant economy. We’ll create all the new ideas – but others will get too much of the benefit”.   But is that really true?

Sunday, February 08, 2015

AstraZeneca coming to Cambridge: A sign of the times?

Earlier this week, planning permission was granted for AstraZeneca's new Global R&D Centre and Corporate Headquarters at the Cambridge Biomedical Campus.  The initial announcement of this plan in 2013 attracted great interest and excitement as it represented a major coup for the region. This seemed to show that Cambridge can not only build £bn companies on the back of its strengths in science and technology, but it can also attract significant direct corporate investment.
Several major corporations have had R&D facilities in Cambridge for many years (Philips, Rolls-Royce, Microsoft, Nokia, to name a few) but the scale of the AstraZeneca facility - £330m investment, 2,000 employees - dwarfs many of the earlier investments by large organisations.
The site of the planned AstraZeneca facility at the
Cambridge Biomedical Campus

AstraZeneca states that it believes Cambridge will provide them with "[..] invaluable access to world-leading scientific expertise and provides excellent opportunities for collaboration with renowned academic research institutions, pre-eminent hospitals and cutting-edge biotech companies". This reflects a widespread trend towards more open models of innovation that draw upon the strengths of specific regional clusters. It also reflects a response to specific challenges facing the pharmaceutical industry, where massively increasing R&D spend has not been leading to 'blockbuster' successes in the market. Establishing R&D activities within a thriving regional innovation clusters is one way for firms to form and manage partnerships that allow them to share the risks (but also the rewards) of research commercialisation.

But there are some potential downsides to this move. There is something of a Catch-22 problem: people want to work and live in Cambridge because of the perceived high quality of life. But the sudden arrival of 2,000 new workers (plus dependents probably doubling that number) in a city with a population of 124,000 may start to put strains on the infrastructure (especially transport and housing), thus lowering the very quality of life that made the move attractive in the first place.

As the Cambridge Technopole continues to build upon its success with more successful start-ups and more inwards investment (most recently from Apple and Amazon), the importance of the joined-up long-term strategy for the city's development within the wider region becomes ever more important.