Cambridge Cluster at 50: the Cambridge Economy Retrospect and Prospect
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Cambridge Cluster at 50 The Cambridge economy: retrospect and prospect Final report to EEDA and partners March 2011 The Cambridge economy: retrospect and prospect Final report to EEDA and partners Contents Executive Summary..................................................................................................................i 1: Introduction to the study ....................................................................................................1 PART A: OVERVIEW REPORT ................................................................................................6 2: Characterising the Cambridge Cluster at 50.....................................................................7 3: Overarching themes for the next 50 years: the Cambridge cluster in national and global space ...........................................................................................................................19 4: Overarching themes for the future: the Cambridge cluster in local space ................26 5: An Agenda for Action........................................................................................................32 6: Towards implementation ..................................................................................................37 PART B: ROLE REPORTS .....................................................................................................40 Role 1: Cambridge as a hub for high tech businesses......................................................41 Role 2: Cambridge as a “research community” (focusing on science and technology research funded principally by the public and charity sectors) .......................................64 Role 3: Cambridge as a city centre economy .....................................................................82 Role 4: Cambridge as a regional centre for the public sector.........................................105 Role 5: Cambridge as an international visitor destination ..............................................120 PART C: THEMATIC REPORTS ..........................................................................................130 Theme 1: Assessment of the availability and suitability of different types of land and premises ...............................................................................................................................131 Theme 2: Planning policies.................................................................................................153 Theme 3: Transport..............................................................................................................179 Annex A: Labour market and employment projections ...................................................A-1 Annex B: Quantifying the scale of the high tech community..........................................B-1 Annex C: Bibliography ........................................................................................................C-1 Annex D: List of consultees................................................................................................D-1 Contact: Christine Doel Tel: 01223 209400 email: [email protected] Approved by: Chris Green Date: March 2011 Chief Executive www.sqw.co.uk The Cambridge economy: retrospect and prospect Final report to EEDA and partners Executive Summary Context and purpose 1. In May 2010, SQW was commissioned by the East of England Development Agency (EEDA) to examine the “Cambridge Cluster at 50”. In commissioning the study, EEDA was supported by a wide range of local partners, including: Cambridgeshire County Council, Cambridge City Council, South Cambridgeshire District Council, Greater Cambridge Partnership, Cambridgeshire Horizons, the University of Cambridge (through the Institute for Manufacturing), St John’s Innovation Centre and leading private sector representatives. 2. The purpose of the assignment was to analyse existing data and consult with businesses and other key stakeholders about the Cambridge economy, in order: • to understand better the performance of the Cambridge economy currently (including the impacts of recession), and the factors that underpin and explain this • to understand long term opportunities and threats for the economy of Cambridge, taking into account changes in government policy and also the different aspirations of new generations of Cambridge-based businesses and residents • to understand the potential synergies and conflicts that exist in relation to Cambridge’s different economic roles, both now and looking forward • to examine the constraints to economic growth – infrastructural, workforce-related, spatial, attitudinal, institutional – and to distil what might be done to address these • to understand – in broad terms – the spatial implications of the above. 3. The main focus of the study was the high tech cluster, which includes the high tech firms, Cambridge University and related research institutions, and specialist services which are located in Cambridge principally to support these core activities. However, the client group agreed at the outset of the study that it would take a broader view of the Cambridge economy, and examine its different roles, including but extending beyond the high tech cluster. The Cambridge economy today 4. Currently, the Cambridge area (including Cambridge City and South Cambridgeshire District)1 has a resident population of around 265,000 people; it is home to around 153,000 employee jobs; and there are well over 10,000 businesses based in the area. On the basis of data from the East of England Forecasting Model (EEFM), the value of its annual economic output (GVA) is approaching £7.5bn (over 7% of the regional total) while GVA per job is 1 For data purposes, we are defining the Cambridge economy as the Local Authority Districts of Cambridge City and South Cambridgeshire. In general, this study has not sought to adhere to a rigid definition of Cambridge: the focus is on the urban area (which falls within Cambridge City and parts of South Cambridgeshire) but where relevant and appropriate, reference is also made to the ring of market towns (Ely, Newmarket, Saffron Walden, etc.) and the wider sub-region i The Cambridge economy: retrospect and prospect Final report to EEDA and partners about £40k in Cambridge City and close to £45k in South Cambridgeshire (compared to the UK and East of England averages of around £37k). According to the 2010 UK Competitiveness Index2, Cambridge is one of the five most competitive cities in the UK. Among local authorities, Cambridge and South Cambridgeshire are ranked 32nd and 24th for competitiveness out of 380 authorities nationally, with almost all those ranked as more competitive being located in London, Surrey and Berkshire (and in most cases due mainly to higher incomes). The Cambridge economy is therefore substantial, productive and competitive, and it contains institutions and firms of national, and in some cases global, significance. 5. Underneath these headline data, the Cambridge economy needs to be understood in relation to the five main roles it plays. All five are important, but the first two – which together comprise the high tech cluster - are likely to play a significant role in national economic recovery and growth, while others are concerned with servicing the local – but rapidly growing – population. • Over the last 50 years, the area has developed a global profile and importance in terms of its technology-based business community (Role 1). In the Cambridge area, there are about 900 high tech businesses employing in total about 37,000 people – close to a quarter of all jobs. In Cambridgeshire as a whole, the figures are 1,400 high tech firms employing 48,000 people3. They include some major businesses such as ARM and Autonomy which are global leaders in their respective fields; and also a large number of smaller enterprises, some of which are growing quickly. Within this context, there is a wide range of business models at play, some of which rely on angel and venture funding to develop cutting edge science, while others are more likely to finance their growth internally and incrementally. Overall, and despite the recent severe recession, the high tech community continues to grow and to innovate. The hard and soft infrastructure to support technology-based businesses is generally well developed, with networks playing a particularly important role in business growth. These are very varied, with social networking now a key part of the mix, and links often developed at three crucially important scales: locally, with London, and globally. The “culture” of Cambridge – where “people go out of their way to be helpful” – is really important in explaining the cluster’s growth. However, there are also some weaknesses which may constrain future growth. These include a shortage of venture funding and housing and infrastructure constraints. The forecasts for the growth of the technology based business community are modest, although they need to be treated with some caution, particularly during a period of considerable economic uncertainty (for example, forecasts cannot predict the impact of disruptive innovations, such as the past emergence of biotechnology as a key driver of high tech growth in Cambridge). They suggest that over the next 20 years, employment and GVA will grow at little more than half the rate of the last 20 years4. 2 UK Competitiveness Index, 2010, Robert Huggins and Piers Thompson, Centre for International Competitiveness, Cardiff School of Management, University of Wales