The ‘Cambridge Cluster‘ has unrivalled pedigree in innovation: it is the source of the jet engine; the structure of DNA; monoclonal antibodies and plastic electronics. Today it is Europe’s largest and most successful technology cluster, employing more than 60,000 people in over 5,000 companies.
The Cambridge ecosystem holds one of the richest seams of scientific knowledge and technology innovation in the world. The Cambridge Cluster is now ranked as one of the top three innovation ecosystems in the world, and is known as Silicon Fen by analogy to Silicon Valley. It attracts globally recognised venture capitalists, consultancy firms, bankers and other specialist organisations who support emerging companies in complex technology and life science industries.
Microsoft has set up its major European research lab in Cambridge; AstraZeneca has relocated its global R+D and corporate headquarters to the city and other companies such Apple and Amazon are also present. ARM, which was founded in Cambridge and still has its headquarters there, is one of the UK’s most successful companies, producing the processor chips that power smart phones and other electronic devices.
The Cambridge Cluster draws on the best human and risk capital. There are significant opportunities for companies to get grants via the ecosystem emerging from the university, which includes organisations like Innovate UK. Cambridge Enterprise, the university enterprise fund, focusses on spin-outs making Cambridge a great place for early-stage companies. Angel groups including Cambridge Angels and Cambridge Capital Group invest and mentor entrepreneur teams and their ideas.
Simon Thorpe, the chairman of Cambridge Angels, believes the uniqueness of the Cambridge cluster stems from the embedded nature of the business support systems in the ecosystem and the level of sophistication in the angel network that has been established.
A driving force behind the success of the Cambridge Cluster is the growth capital. There is a mix of Cambridge-specific investment firms such as IQ Capital and Cambridge Innovation Capital (CIC), and new firms such as Ahren Innovation Capital, which boasts multiple Nobel laureates as scientific partners. There are also those with wider geographical investment mandates. Amadeus Capital Partners, founded by Herman Hauser and best known for founding Acorn Computers, has a wider geographical mandate but strong Cambridge ties. Parkwalk Advisors, part of IP Group, is another familiar name in university spin-outs.
Anne Glover, CEO and co-founder of Amadeus Capital, believes that the supply of private capital is yet to reach its full potential, especially when it comes
to later stage investing. But the role of international corporate giants with a presence in Cambridge continues to evolve: from building research centres and providing grants and support to corporate venture capital investing.
Where next? Brexit. The Cambridge Cluster is said to be well placed to ‘buck a Brexit slowdown’. It has developed over many decades with firm links to high profile medical professionals, investors and entrepreneurs. Where Brexit has no doubt caused unease, several larger firms including AstraZeneca and Arm have confirmed their long-term commitment to Cambridge since the 2016 referendum.
Corporate investment into the city, including mergers, acquisitions, private equity and venture capital funding, has increased since the UK voted to leave the EU. More than £35 billion was invested into the Cambridge cluster between 2016 and 2017, proving that post Brexit, the Cambridge Cluster growth prospects remain strong.
An important factor is the high number of talented academics and graduates from Cambridge university. Microsoft, Samsung and Darktrace, a local success story, have successfully created a growing cluster of both mature and start-up artificial intelligence developers.
Another encouraging sign for the Cambridge Cluster is that since Brexit, Savills is tracing more than 250,000 sq. ft. of real estate for businesses in Cambridge who are looking to expand. In 2019 Cambridge also saw a 45 per cent increase in tier 1 exceptional talent visa applications, mostly from the US and China, showing that the UK is still attracting talent despite the uncertainty.
