Silicon Fen has program for success

By THIS IS MONEY
Updated:

 

NEXT WEEK, a consultants' report will land on the desks of some of East Anglia's most influential business executives and politicians, including Sir Alec Broers, Vice-Chancellor of Cambridge University. Its contents are so important to the future of the British economy they will also be sent to 10 Downing Street.

Commissioned by Government, the report will add weight to the position of the Greater Cambridge Partnership, a high-level promotional group which believes the authorities should be 'investing in success'. Instead of just helping the regeneration of poor communities, the argument runs, the Government - with private-sector support - should pour billions into some of the fastest growing and most prosperous regions in the country. This has triggered some soul-searching within New Labour, whose instincts are to leave economic development to the markets and focus Government resources on education, health and tackling poverty. More specifically, the report will back the view that the Greater Cambridge hi-tech cluster - Silicon Fen - should be at the top of the Government's list when it comes to handing out development funds to already prosperous areas. If this region's potential is to be unleashed, it will say, urgent action is required.

More than £2bn of new money needs to be mobilised over the next five to 10 years, some of it through public private partnerships, to provide social and economic infrastructure - better roads, railways, schools and thousands of new houses.

Without such investment, the city - home to semiconductor designer ARM Holdings, software engineer Autonomy and biotech leader Cambridge Antibody Technology - will be suffocated by shortages of skilled and semi-skilled labour, an inadequate transport system and lack of housing. Worse, says Hermann Hauser, the area's leading venture capitalist, this will happen just as Cambridge has achieved the critical mass which could ensure it a vital role in the future growth of Britain's knowledge economy.

But in order for investment on this scale to be put into place swiftly, a series of highly controversial political decisions will have to be taken. The laborious planning procedures and often-conflicting structures of local government will have to be subordinated to an economic strategy agency with explicit planning authority, local officials say.

In a hint of the upheavals that lie ahead for its unsuspecting, predominantly rural, communities, they recognise the time is fast approaching when it will be necessary to encroach on the strict green belt which protects the beautiful medieval university town. The population of Cambridge has been effectively limited by planning directives, dating from the late 1940s, to around 110,000. Now a new settlement needs to be built, ultimately to provide housing for up to 25,000, located on the edge of the green belt.

Because the rapid growth of Cambridge's hi-tech cluster has sent housing prices soaring towards London levels, even eminent academics are now turning down offers of professorships. Provision must therefore be made for homes which university lecturers, teachers, nurses, laboratory technicians and software engineers can afford.

If the correct decisions are taken now, its supporters say, Cambridge's tech cluster could become as important a source of wealth and innovation for Britain as California's Silicon Valley has been to America or the financial sector of the City of London is now to Britain.

'There is nowhere in the British Isles that does not want to be a hi-tech cluster,' said Vice-Chancellor Broers, a former top scientist at IBM in America and professor of engineering at the university. 'But we cannot have 10,000 clusters dotted around these islands.'

The university town itself, with its graceful medieval architecture, must be protected, he said. This means development in a region that could stretch up to 50 miles from Cambridge. Already, a link is being established to the so-called Ipswich corridor where, he points out, British Telecom has its highly regarded Martlesham laboratories employing some 5,000 technicians.

In effect, the university and business community are inviting the Government to bet the still embryonic cluster that has already developed around Cambridge can grow into a world-class community of fast-growing innovative companies. But success cannot be assured.

Even those arguing in favour of Cambridge say Government policy must also support other clusters of knowledge-based businesses such as the one in London with Imperial College at its hub.

All that can be said with confidence is that, today, the Cambridge region looks to be Britain's best prospect, that Germany and France have national strategies aimed at promoting the development of such clusters and that, for a variety of reasons - including a pro-active stance by the government of the State of Bavaria and the presence of technology-led firms such as Siemens and BMW, Munich has a head start.

If Britain can develop competitive hi-tech clusters of its own, and if Cambridge can fulfil its potential, it would give the British economy a much better chance of building a range of knowledge-based firms which would stand comparison with those in France and Germany. If not, the long-term decline of British industry will continue.

Most watched Money videos