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Innovation Champions Network:

The Cambridge Cluster Description

Alan [email protected]

2nd April 2004

www.innovation-champions-network.orgArabellastr. 17

81925 - Mnchen


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Chapter 1

Cambridge

1.1 Introduction

Summary

Cambridge is situated in the East of England, an ancient seat of learn-ing within a region historically known for farming, fishing and as thefirst centre in Britain of the wool industry and the leather goods in-dustry. Cambridge is 56 miles north east of London and is now animportant geographical location between the industrial West Midlandsof England and the East Coast ports.

The industrial structure of the region has changed dramatically

over the centuries. Thetford in Norfolk - north of Cambridge was thefirst great centre of the wool trade in Britain - in medieval times. Thiswas before Birmingham, now Britains Second City (after London) ex-isted. The wool trade migrated to the north west of England in the19th Century, during the first Industrial Revolution - when the newtechnology of the day - the mechanised approaches to wool process-ing worked best in the damp environment of Manchester and the sur-rounding districts. The fishing industry has declined - less than 100fishermen now cast their nets along the protracted coastline of the re-gion, in the North Sea. Leather goods, especially footwear, moved northwest into the West Midlands Region in the early part of the 20th Cen-

tury. Farming and agriculture in general - including bio-agricultureremain in place, but whereas there was traditionally, apart from somelight engineering in the sub-region in earlier times, little industrial andbusiness activity, the sub-region has become one of the liveliest NewEconomyregions in Europe during the last forty years - with signifi-cant and rapid progress towards a technology based industrial econ-omy -based on the cluster development, which has accelerated since1980.

The latest economic data shows GDP per capita in the sub-regiongrowing 6.5% during a period when the UK economy grew a little above3% and the US Economy by 3.8%. During the same period,the Cam-

bridge sub-region grew the jobs base by 80% as UK jobs grew by 16%.

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2 Chapter 1. Cambridge

Hi-tech jobs reached 50,000 within the total job base of 360,000.Cambridge University has played a pivotal role in the transfor-

mation of the region, the city and the surrounding area from a me-dieval seat of learning to a great educational centre and wealth creat-ing knowledge based business centre - a transformation that has takenmore than 40 years and has been largely bottom up- a result of build-ing communities of "common purpose" - and matching the aspirationswith achievements, rather than through top down government policy,intervention or funding.

The sense of common purpose - of integration and coherence, theculture change which has been evidenced have been as important asthe superb science base available in Cambridge University, the intel-lectual capital of academics and business people and the development

of support structures to enable the formation and sustenance of manynew companies. Two examples of expression of what it takes to growa sustainable hi-tech cluster are shown in the lecture presentationEmerging Biotechnology Clusters (see [Sai99, Bar03]). Cambridgehas most of the necessary characteristics.

The real formation of the current cluster began in 1960, whena spin-out from Cambridge University - Cambridge Consultants Ltd.gave birth to a family of technology providers - and the cluster grewfrom there. 350 Technology Companies by 1985 (see [Par85]), 2,000by the year 2000 (see [Par00]). 3,500 by 2003 (see [Bea03]).

The University

Cambridge University is pre-eminent in the World as one of the great-est centres of learning, research and innovation. Some of the greatdiscoveries made in Cambridge University can be seen by visiting theuniversity website www.cam.ac.uk. The university boasts more NobelLaureates than any other University - 80 have been honoured.

However, traditionally, the university saw its role as a two streamactivity - teaching and research. Many of the great inventions and dis-coveries therefore were not exploited to the advantage of the universityor the people of Cambridge. Many were commercially exploited over-

seas, most notably in USA. The institutional change needed to convertthe university as a whole to the thinking of UK Government whichhas prevailed for the last few decades - that universities have a thirdstream of activities to pursue - commercialisation of intellectual prop-ertyand new business creation- has been a struggle for Cambridgeas for all leading UK universities. Cultural change in educational insti-tutions founded 800 years ago - as was Cambridge (founded in 1209),with its very special college-based system, was never likely to be easyor fast. That it has changed so radically is itself astonishing and agreat credit to leadership in the University and the local communityover a period of 30-40 years.

1.1. Introduction 2nd April 2004


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Reference [His04] has information on how the university has es-tablished a Centre for Entrepreneurial Learning (CfEL) and Cambridge

Enterprise - a unit bringing together technology transfer expertise with business creation skills and seed funding. This represents dramaticprogress and international leadership in innovative approaches to university - business collaboration. In addition, Cambridge Universityemploys business people as Entrepreneurs in Residence. All of thishas been a major influencing factor in the change in culture which hasbeen witnessed in the Cambridge sub-region over the past decades.

Reference [Bea03] carries information on the world-class and inter-related science and technology strengths of Cambridge University, whereleading edge technologies overlap, and where the benefits of the prox-imity of key and pervasive technology platforms are seen in the emer-

gence of highly innovative new processes, products and business ideas.Two other reports [Par85, Par00] show the status of the technology evo-lution in those years.

Institutional change has been at the heart of the progress seen inenabling Cambridge University to commercialise research to the ben-efit of cluster development and to encourage investments from majorcorporations such as Microsoft, Hitachi, Toshiba, Glaxo Smith Kline -and others.

The Cluster and the Business Community - Community ofCommon Purpose

Much detail on the current status of the Cambridge Cluster is includedin the substantial reports (see [Bea03, Par85, Par00, Hou03]). It isproposed that in addition to the factual evidence of cluster growth -included in all these and other reports, a very major factor in enablingthe growth of the Cluster has been culture change - culture in termsof the generation of more entrepreneurial spirit - and, especially - thedevelopment of a belief in the common purpose in the entire commu-nity.

Government Support

This has been more moral and inspirational than in terms of financialresources. Exceptions have been government financing of the Cam- bridge Entrepreneurship Centre from 1999 and the Cambridge-MITInstitute from 2001. These have been important factors in bringing theUniversity closer still to the business community - and in enabling theuniversity to develop commercial programmes internally. Governmentattention and support - not to mention funding - have been significantstimuli in bringing necessary institutional change to the university.

1.1. Introduction 2nd April 2004


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Other Factors

Development of the Cambridge Cluster has also been influenced by

the attractiveness of the Cambridge area - as a place to live - althoughdeficiencies in the physical infrastructure and the high cost of housingare major drawbacks. Cambridge University does attract outstandingscientific and technical staff - who want to work in major centres ofexcellence - despite the difficulties of housing and transport etc. Theattraction of management talent is not so straightforward or easy. Oneof the great difficulties in all cluster centres is attracting commercialmanagement talent. Cambridge is no exception. Building managementteams is a major part of cluster development - and the raw materialsfor this need to be available.

Overall assessment of the economic viability of the Cambridge sub-region is not in doubt. 6.5% growth in GDP per capita has been con-firmed and is ahead of virtually all such results in European and USsub-regions. Job creation has also been impressive.

The ability of the community to find the means to develop support-ive aspects of the infrastructure are key issues as we look ahead andask the question - can we sustain this growth record?.

1.2 Demographics

Number of workers in the cluster region: 360,000 (50,000 in Hi-

Tech., 35,000 in Manufacturing)

Total population in the sub-region: 650,000

Connectivity and Infrastructure

The infrastructure deficit is the main problem for many of those who wish to see the ongoing growth of the sub-region. The Tymm Report(see [TP01]) and The Cambridge Futures Group report ([ECoAU01])have estimated a need for a 2bn investment in the infrastructure toensure road, rail, housing and school development etc. The Cambridge

Futures Group report examines 7 possible scenarios to overcome thecurrent difficulties in the infrastructure. It is reasonable to be opti-mistic as we work together to match infrastructure development withthe continued growth of the economy and the growth of the cluster andnew business generation in general.

Significant detail is available on these issues for those who are in-terested. Much is to be found in [Bea03].

On the positive side, Cambridge is served by two international air-ports - Stansted (40 minutes journey) and Luton (one hour journey).Neither yet has transatlantic services, but have a large number of Eu-ropean connections and UK flights. Transatlantic services are expected

1.2. Demographics 2nd April 2004


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Figure 1.1: Heatmap of the Cambridge Cluster by concentration ofinnovation based companies. (see [Bea03])

from Stansted during 2004. Heathrow and Gatwick international air-ports are two hours travel time away - so reasonably accessible.

Rail links with London are good with frequent fast services (50 min-utes journey time).

1.3 Spectrum of the Cluster and Related Indus-

tries/Pillar Companies

The Cambridge Cluster is multi facetted and multi-connected. It em-braces the three major and pervasive technology platforms - informa-tion technology, biotechnology and materials/ nanotechnology. Schemat-ics of the importance of this will be found in [Bea03]. Critical to thedevelopment of the cluster has also been the evolution of a set ofhighly competent and specialised set of consulting firms/ technology

1.3. Spectrum 2nd April 2004


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providers (see figure 1.2) which in many ways have acted as inter-mediate clusters between the university and the business field. In

the report [Bea03] details of this cluster within a cluster are given.The company cluster mirrors the Pervasive Technology cluster, and theinnovative possibilities found in the overlap of pervasive technology re-search groups.

The Cambridge Cluster benefits from great strength in :-

Information technology (including sentient computing)

Bioscience and biotechnology

Materials and nanotechnology

It also now benefits from excellent human resource infrastructuresupport - from the university :-

Judge Institute of Management Studies

Centre for Entrepreneurial Learning

Cambridge Enterprise

Institute for Manufacturing

Cambridge-MIT Institute

Cambridge University Entrepreneurs (CUE)

and from business based support structures :-

Business Links and Chamber of Commerce

Technology Provider Cluster - contract R&D

The Cambridge Network

ERBI - Eastern Region Biotechnology Initiative

CHASE - Small Business Network Cambridge and Europe Technology Club

Greater Cambridge Partnership

The Library House (investor organisation)

Local venture capital cluster - 17 Funds

Great Eastern Investment Forum and other business angel net-works, Cambridge Angels and Cambridge Capital group



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Government Office in the East of England, UK Trade Invest, Eastof England Development Agency (EEDA) and Invest East (all Gov-

ernment initiatives to stimulate business creation and develop-ment and international trade)

What has grown and developed over time is a vibrant and respon-sive community of common purpose which seeks to be a collectivesteward for the continued economic development of the sub-region. Atthe same time, culture change over the past 40 years has been im-mense - to enable this common purpose to be expressed and pursued.

Pillar Companies and Clusters Within the Cluster - Interna-tional Connections

The chronology of the Cambridge Cluster and the pre-cluster is to befound at [Bea03]. In the late 19th. century, Horace Darwin, descen-dent of Charles Darwin, founded the first technology company in Cam-bridge; - Cambridge Scientific Instruments. Before that, in 1654, Cam-bridge University Press might claim to have been the first spin-out.

In the 1970s and 1980s we saw the birth of the first Cambridgeelectronics cluster. Groundbreaking work in electronic calculators, watches and other gizmos was done at Sinclair Radionics which hadbeen established in Cambridge in 1961. Sinclair Research evolved fromSinclair Radionics in 1979 with a specific focus on microcomputers

(Sinclair Research was later sold to Amstrad in the mid-1980s). AcornComputers was founded in 1979 by Hermann Hauser and Chris Curryand over time went on to sign contracts with various major companiese.g. Apple (UK education market), Digital Semiconductors (StrongARMprocessor) and Oracle (NetComputer) and in the 1980s, practically allBritish schools were equipped with their computers. In 1998 Acornchanged direction and announced that all work on desktop computershad ceased and that developments would focus completely on digital TV market. By 1999, the set-top box/workstation division of AcornComputers had been acquired by Pace Micro Technology and the re-mainder of Acorn was re-launched as Element14 to focus on commu-

nications technology (Element 14 was susequently acquired by Broad-com in 2000 for close to $600m). The importance of these early exam-ples is not only how advanced technologies came to be developed andcommercialised but also how these early companies seeded the Cam- bridge Cluster in terms of people, competence and ideas much likeFairchild Semiconductors had done in Silicon Valley.

Also in the 1970s was the emergence of other important technolo-gies in Cambridge with the formation of Domino Printing Sciences in1978. This was the beginning of the formation of a family of Ink Jetcompanies depicted in reference (Article Barrel Barrell AW - Big TentEvent 2001 ) which has spawned 60% or more of the Worlds Indus-

trial Ink Jet printing Industry.



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Figure 1.2: Birth of a cluster of world-class technology providers (see[Bar01])

SO - early "Pillar Companies" which gave birth to families of subse-

quent companies include :-

Cambridge Consultants

The Welding Institute - TWI

PA Technology

The Technology Partnership

Scientific Generics Group

Symbionics

Plextek

Team Consulting

Sentec

Domino Printing Sciences

Acorn Computers

Sinclair Radionics

ARM Holdings Virata

The Technology Providing Family including Cambridge Consul-tants, PA Technology, The Technology Partnership etc., have been highlyeffective incubators and 60 company spin-outs / start ups have beenidentified resulting from this incubation.

And in life sciences, amongst important Pillar Companies -

Chirosciences

Cambridge Antibody Technologies



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Peptide Therapeutics (became Acambis)

Robotron

And the evolving Science Park structure was in a sense - part of thePillar structure with Science or Research Parks established at -

Trinity Science Park

Granta Park

Cambridge Research Park

Peterhouse Science Park

Melbourn Science Park

Ely Science Park

St Johns Innovation Centre

Littleport Innovation Centre

Incubator at the Wiliam Gates Building - computer laboratories -Cambridge University

These are the principal centres. There are more - and more areplanned.

Cambridge also has, in life sciences :-

Babraham Institute and Bio- Incubator

Sanger Centre - Wellcome Genome Centre

Institute of Biotechnology - which also incubates

And there are others.Concerning inward investment, more recent major commitments

have been made by :-

Microsoft - first R&D facility outside USA in Cambridge and in-vestment in new Computer Labs - William B. Gates Building.

Toshiba - Joint Venture with Ccambridge University Departmentof Physics - and a spin out resulted - first Toshiba spin-out everTeraview Ltd.

Hitachi

GlaxoSmithKline

Rolls Royce

There are others.Interestingly, Siemens, Boeing, Microsoft, Rolls Royce, Unilever and

others have invested in Cambridge based venture funds / and or com-

panies. More of such activity is ongoing.



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Figure 1.3: Birth of a world-class cluster - industrial Ink Jet, Cam-bridge (see [Bar01])

1.4 Scientific and Technical Potential

This is huge - and can only be assessed by visits to the CambridgeUniversity and other related websites and cannot be accurately sum-marized in a report such as this. All key scientific disciplines are rep-

resented and active in the university and the commercial R&D facilitiesin and around Cambridge. The charts shown in figures 1.4, 1.5 and1.6 summarise the three main and pervasive technology platforms thatexist here - with their sub-sets - and the last of these figures also indi-cate the way in which the cluster has evolved in Cambridge over timeand embraced increasing aspects of technology along the way.

The tacit knowledge - uncodified knowledge which can be exchangedwhen these technology experts overlap and interact can lead to ex-plosive innovation.

Then, in addition, in the immediate sub-region, we have other Uni-versities - Anglia Polytechnic University, University of Essex, University

of East Anglia, University of Hertfordshire, University of Northampton- and others.

Cambridge University has 17,000 Students - more than 60% areon scientific and technical courses. The MBA Programme is the no.1 in the UK and has a significant proportion of students from over-seas. Cambridge University now has 17% of the student populationfrom outside the UK - spread over all faculties and disciplines. Thisdiversity is seen as a very positive factor relative to innovation. Theoverseas element of the population in Cambridge University has in-creased by 300% in the last 10 years. The implications of this shift inethnicity and culture have yet to be researched and understood. There

1.4. Potential 2nd April 2004


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Figure 1.4: Three converging revolutions, three pervasive technologyplatforms (see [Bea03])

Figure 1.5: Overlapping technology clusters in the Cambridge Cluster(see [Bea03])

1.4. Potential 2nd April 2004


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Figure 1.6: The emergence of technology clusters in Cambridge overtime (see [Bea03])

is, however, anecdotal evidence that multiculturalism and cultural di-versity increases the propensity for innovation (Silicon Valley is a goodexample).

The Library House in Cambridge, a sponsor of Innovation Cham-pions Network is currently completing a nationwide study - coveringall significant UK universities, including Cambridge, on commmercial-isation of technologies from universities in the form of spin-out com-panies. The results of this study will be published in the spring of2004.

Cambridge University has, for may years, been rated No. 1 in UKas the university contributing more to new knowledge in science andtechnology year by year and the science base is deep and broad. Thebest reference is the Cambridge Universtiy website (www.cam.ac.uk).

1.5 Business Development

Cambridge and its cluster have not had difficulties attracting the topscientific talent into the university with more Nobel Laureates than anyother in the world.

Executive and imported entrepreneurial talent is something differ-ent. One of the biggest challenges in Cambridge is to find for newentrants to The Cluster the right calibre of CEO and marketing ex-ecutives - and other disciplines like finance also need building up inmany early stage companies. There is a shortage. Mentors are abun-dant in Cambridge and are helping many young companies and en-trepreneurs.

Cambridge has developed strengths in the support structure.

1.5. Business Development 2nd April 2004


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The Cambridge Network - a vibrant network, brings people to-gether, including those looking for careers and those seeking ex-

ecutives Centre for Entrepreneurial Learning, Judge Management Insti-

tute, Institute for Manufacturing, Centre for Technology Manage-ment, College of Marketing - and others - are all contributing

Structured mentoring programme is very valuable. 100 maturementors on our database

Many courses for young entrepreneurs within and outside theuniversity . Examples - Masterclass on Entrepreneurial FinanceBuilding an Effective Board of Directors run by Centre for En-trepreneurial Learning . There are more

The website www.cfel.cam.ac.uk gives a summary of the pro-grammes currently offered by the Centre for Entrepreneurial Learn-ing. The Summer School for Entrepreneurs and EntrepreneursBootcamp are already over-subscribed for 2004. The SummerSchool is a model programme which is being adopted in otherlocations for intensive coaching of aspiring entrepreneurs. It isa one week- programme - residential - open to those already in business and those about to start - but focussed on innovativetechnology businesses

It is clear that entrepreneur support, mentoring and educationare critical factors in optimising business start up performance.

IT companies are especially well serviced by the Cambridge En-terprise Incubator in the Cambridge University Computer Labo-ratories in the William B. Gates Building. On-site mentoring isavailable.

There are a variety of talent finders- recruitment firms, head-hunters etc. But the informed network of business angels andbusiness people is the most effective network of talent finding andplacing. The business community works for the common good.

A large array of management training providers supports the ex-cellence of the Judge Institute of Management Studies and theCentre for Entrepreneurial Learning. And London is only 50minutes away by train - where numerous other opportunities formanagement training and development reside.

So -in summary- there is always a shortage of the highest cali-bre talent in fast growing business regions - but Cambridge has advantages - including the attraction for Cambridge University alumnito come back to theiralma mater- and the attractiveness of the cityand environs, which provide balancing advantages to help manage any

deficits.

1.5. Business Development 2nd April 2004


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Figure 1.7: Venture Capital Funds with Regional Associations (see[Bar01])

1.6 Investors

Of all European provincial centres of high-technology, Cambridge iswithout doubt the best served with business angels, venture capital

firms and other financial Services. To summarise :-

Three established business angel networks operate in Cambridge.They have been instrumental in enabling very early stage compa-nies / entrepreneurs to obtain finance and other support. Moreinformation is included in the detailed section on business angels

The Library House Ltd., an organisation which effectively sup-ports a wide range of investors and the investment processes, hascollected information on business angel, VC investing and clus-ter development in the region. This information is available on a

confidential basis to Library House members. More informationis included on The Library House - in a specific section of this re-port and further details can be found atwww.libraryhouse.net.

The Library House is the primary supporter of The ChampionsNetwork in Cambridge - representing the Cambridge Cluster

The Cambridge Cluster of seed and VC funds have served nu-merous start-ups and early stage companies well. The figure 1.7shows the VC cluster

This cluster also provides connections and access to larger, inter-national VC funds based in London and other major centres in

Europe, North America and Asia.

1.6. Investors 2nd April 2004


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Major investment banks have been active in the cluster - from allover the world. Some are more interested in the growing numbers

of high net worth clients concentrated in the region - resultingfrom the success of cluster companies. Others are working withtechnology based companies to assist international growth anddevelopment

Corporates have invested in the sub-region, in a variety of ways :-

By direct investments into innovative companies (eg. DailyMail-Harmondsworth Publishing into Vetstream Ltd.)

Microsoft, Hitachi, Toshiba, GSK and others into embeddedlaboratories which have generated a number of spin-outs (eg.Teraview from Toshiba Research UK)

Investment into Cambridge VCs (eg. Boeing and Siemens in-vested in TTP Ventures, Microsoft into Amadeus Capital Part-ners, Hutchison Whampoa into the Cambridge Gateway Fund)

Straightforward corporate venture limited partnership funds(eg. Unilever Ventures, Siemens Ventures, Intel Capital)

1.6.1 The Library House Ltd.

The Library House was founded in 2002 by entrepreneurs and busi-ness angels supported by a significant number of companies operating

in and around the investment community. It is more fully described atwww.libraryhouse.net. The principle purpose of The Library Houseis to create transparency in the areas of prospective interface betweensources of capital for innovative, knowledge based companies, andemerging technologies and companies. It seeks to increase dramati-cally the processes whereby venture capital firms and other investormembers can source information and investment candidates againstdeclared criteria. Library House has established a powerful researchdepartment and database of companies, initially in Cambridge, withservices now being rolled out nationally in the UK and internationally.It organises numerous events which bring together selected investors

and investee candidates and conducts enquiries, reviews and carriesout a variety of research for public and private clients - all withinthe realm of technology, knowledge transfer and innovation leading tocompany and wealth creation. Library House members have access notonly to data and customised research and events, but a well appointedCambridge office facility - effectively The Cambridge Office for out-side investors. The membership base is international and includes lawfirms, accounting firms, innovation agencies and corporates as well asbusiness angels, VCs and banks. Library House operates solely on the basis of fees earned from members. There are no charges for compa-nies covered by the Library House research and there are no success

fees for deals completed as a result of the Library House involvement.



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Library House maintains a clear position of neutrality - a highly ob-jective approach to information sourcing and provision. Library House

reports are authoritative and fact based. Much more information canbe found on the Library House website and can be provided on requestfrom the company. Library House is the sponsor of The CambridgeCluster within the Champions Network.

Cambridge Share of Recent Early Stage Investment, PublicMarkets and Liquidity

The UK has been subject to the same downturn in early stage invest-ing as other parts of the Western World, following the burst of theE-Commerce Bubble phenomenon. Cambridge has performed better

than anywhere in Europe as a sub-region in continuing to attract in-vestment. Library House reports / research show that 25% of all suchfunding in the UK in the past two year period has been invested inCambridge. We believe 10% of all European early stage investmentsin that period have been accounted for by Cambridge. Levels of in-vestment in the sector in Cambridge hardly declined whilst they wereplummeting elsewhere in Europe and UK. Library House has itself beena factor in making investment in Cambridge a more transparent andeffective process, and justifiably claims some credit for the situation.

Public markets are not sub-regional, and the UK public marketsfor technology in particular have been very depressed. IPOs effectively

stopped for five quarters. Cambridge companies however, appear to beamongst the first to begin the process of recovery. There have beenissues on The Alternative Investment Market (AIM) and full listings onLSE are planned as this protocol is being written. An example is Cam- bridge Silicon Radio - CSR - which has received significant venturecapital, performed extremely well in developing its Bluetooth basedsingle chip CMOS technology and is pursuing a successful Fablesschip business model. The company was founded as a spin-out fromone of the Pillar Technology Companies in 1998 (Cambridge Consul-tants) - so the gestation to this point has taken five years. The technol-ogy development was ongoing for a number of years before the spin-out

- a reminder of how long it may take to bring the best innovative tech-nology from laboratory to products in the market. There were, even in lean times, in Cambridge a number of good

issues (eg. TTP.Com in 2001) - and a number of high value tradesales (eg. Geneva Technologies to Convergys Inc. in 2002) and mergers(eg. Virata with US based Globespan in 2001). Through the leanertimes, some of the innovative Cambridge based companies foundedand floated earlier, continued to grow, increase profitability and sus-tain market positions despite ups and downs (eg. ARM Holdings).

This is not to state that all is well - it seems, however, that cashis available for the worthy companies able to be matched with wor-

thy investments in an environment where transparency and mutual



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understanding have been enhanced.

1.7 Support Services

The growth of the Cambridge Cluster and the overall economic advancement of the sub-region, as reported in [Bea03], Library Housereports and other publications, have been possible partly due to thegrowing quality and quantity of support companies and services. Prin-cipal among these have been:-

International law firms

International accounting firms

Worldclass patent agents

Consulting firms

International banks

Financial and other support for entrepreneurs through direct investments in educational bursaries and research posts (eg. Mi-crosoft programmes)

The above are all from the private sector.Cambridge has also seen significant advancement in support for en-

trepreneurial education and the commercialisation of intellectual prop-erty from the university. Much is still work in progress and moreneeds to be done, but contributors to cluster and economic develop-ment through entrepreneur support and education have included :-

Advancement of The Judge Institute for Management Studies tobe one of Europes leading business schools, attracting high cali-bre UK and overseas students

Establishment of the Cambridge Entrepreneurship Centre (CEC)in 1999 with 2.9m of government funding

Development from the CEC a separate Centre for EntrepreneurialLearning in 2003

Establishment of Cambridge Enterprise, dealing with technologytransfer, intellectual property management and exploitation - alsoworking on new business creation and providing a large mentorpanel

Establishment of positions for three Entrepreneurs in Residence working throughout the university with flexibility to encouragethe spirit of enterprise and to actively advise and support aspiring

entrepreneurs

1.7. Support Services 2nd April 2004


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Establishment of CUE - Cambridge University Entrepreneurs - astudent led body, running a successful annual Business Plan and

Business Creation Competition Institute of Manufacturing and Technology Management Group to

support manufacturing and product based innovative companies

Cambridge-MIT Institute (CMI) - cross Atlantic government sup-ported institute operating between Cambridge University and Mas-sachusetts Institute of Technology in Cambridge Massachusetts(USA)

Regional inter-university collaboration involving 10 Universitiesin East of England, sponsored by EEDA , the regional develop-

ment agency (RDA), for knowledge transfer to support enhancedeconomic development.

Cambridge University Challenge Fund and Cambridge UniversityVC Fund can provide early stage finance for University spin-outs.

Other universities in and around Cambridge have contributed tothe support services development and should not be overlooked.Anglia Polytechnic University and Luton University both have ex-tensive centres for language and culture in business, which pro-vide significant help to businesses growing towards and into in-ternational markets. There are other examples. Concerning in-

ternational business support, within Cambridge University, TheEast Asia Institute runs a specific M.Phil degree on history, lan-guage and culture - politics and economics in China - for Euro-pean students planning extensive activities in China.

Science Parks, Innovation Centres, Incubators and Acceler-ators

The Trinity Science Park, established in 1970 by Trinity College, wasthe first such park in Europe. After a slow start it has grown and isnow fully developed with some 80 companies resident, some now large

/ medium sized, many having grown from small starts in Cambridge,some imports as outposts or research centres of larger companies (eg.Hitachi, Amgen, Toshiba). None are large scale manufacturers, it wasnot intended to be an Industrial Park. The science park has a confer-ence centre / community meeting place and is outside the city limits.It has been regarded overall as a success.

From the start with Trinity Science Park, science parks have grownin number, and now include (for a more extensive list see section 1.3):-

Melbourn Science Park

Granta Science Park



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Peterhouse Science Park

Cambridge Research Park

In the 1980s, after Trinity Science Park had been established, thefirst Innovation Centre was founded nearby at a site owned by St Johns College. It now houses 55 small companies, all knowledgebased, some service providers, some technology / invention based. TheSt Johns Innovation Centre (SJIC) offers flexible, good quality accom-modation (short rental agreements) and shared services such as recep-tion, telephones, meeting rooms, marketing college and has a numberof levels of service - starting with an address and a PO Box service -a Cambridge address is useful in the technology business, through tomuch higher levels of support, including mentoring, accounting ser-

vices etc. It is not however, promoted as an incubator. There aresupport managers on site, but more on an administrative level thantechnical / managerial. SJIC offers no direct access to funds. The Gov-ernors of the Colleges of both Trinity and St. Johns regard the parkand centre as a means of revenue generation and rarely take equityinvestments in companies (there are exceptions). Such investmentswould be made through formal decision of the College Investment andFinance Committees.

St Johns Innovation Centre has also sponsored a biotechnologyincubator, and most recently, supported an investment from a Chinesegroup who have established The China Innovation Park UK (CIPUK)

within the SJIC site - to promote the migration of Chinese knowledgebased businesses to Europe / Britain.

Other innovation centres in the Cambridge sub-region and the Eastof England, now include :-

Littleport Innovation Centre - North of Cambridge in a rural area

Peterborough Innovation Centre - Industrial City with engineeringbase North of Cambridge

Luton Innovation Centre - Industrial location South of Cambridge

Framlingham Innovation Centre - County of Suffolk - East of

Cambridge

Within the East of England region, large corporates have begunturning R&D Centres into more open science and innovation park op-erations. Examples are British Telecom with the Brightstar incubatornear Ipswich and Unilever with a science park close to Cranfield Uni- versity at Colworth Park in Bedfordshire. The originally governmentowned Defence Evaluation and Research Agency- DERA a largeR&D organisation has been privatised under the name QinetiQ Ltd.- and operates with a strategy to exploit intellectual property and develop new knowledge based businesses. QinetiQ has established an

in-house venture fund.



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Accelerators and Incubators

Terminology can be confusing and labels can be ill-defined and mis-

understood. UK Business Incubation is now a large institutionalisedorganisation - and incubation and incubators in some Europeancountries have been unsuccessful in getting companies started suc-cessfully. In Israel, a conscious government investment programmeaims to get companies in the technology sector started and nurturedon a non-commercial basis - in the sense that they invest signifi-cantly and with patience - and use expert resources to get well selectedcompanies incubated. Some do not like the incubationterm. Incu-bators are where we put sick babies- is a comment sometimes heard.Discipline and clear objectives for the incubator seem essential ingre-dients if the approach is to be truly successful. Many incubators in theInternet Bubble era were nothing more than a building and limitedsources of finance. Therefore, this is a subject area lacking clarity withno clear evidence of what succeeds. What we do know, is that manyinnovative companies have succeeded because the principles were wellsupported during the invention and development stages in a university department, but only when the eventual business model andexecutive management were of a high commercial order and adequatefinance made available.

Acceleration

Acceleration is the term applied by companies set up to find promis-ing early stage technology start-ups - or intended start-ups - and toselect the best, nurture, mentor and even provide some seed funding- and steer the candidate companies towards the A round of venturefunding. The accelerator companies (an example is Cambridge En-terprise Accelerator Ltd., another in Cambridge is 10 Sails Ltd.) mayinvest in an A round and hope to stay in at round B. But they areessentially the finders, seeders and early developers. The concept ofacceleration, as opposed to the previous concept of incubation isbecoming more popular in UK and Cambridge in general. Too manyincubators have been buildings. Real incubation and acceleration

requires engagement with the people by skilled and experienced busi-ness people who have been there and done it. This is an issue fordiscussion within the Champions Network. It touches a number ofbest practice and learning issues.

Professional Services

Cambridge has attracted the influx and development of firms devotedto:-

Financial and accounting services - all key players are present,

and many smaller firms



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Corporate finance

Equity investment - VC firms and angel networks

Banking - all key players are present

All aspects of insurance, pension planning etc

International law, company law, transactions etc

Patent protection and intellectual property management

Management training and development

Recruitment / headhunting

IT infrastructure support firms / Website builders and supporters

Language training and translation / interpreting

Consulting, marketing, market research and other agencies.

Much support is available from government sponsored bodies suchas Business Links and from Chambers of Commerce, but this hastended to support smaller, conventional (micro) companies rather thaninnovative technology start-ups.

Mentor panels have large numbers of available, experienced busi-ness mentors to assist early stage companies - and many mentors

progress towards non-executive director positions with mentoree com-panies.

The Cambridge Network

The Cambridge Network (www.cambridgenetwork.co.uk) has been amajor force for good within the overall support structure. Founded bya number of companies and Cambridge University in 1998, it spansmany interests, organises meetings, special interest groups, and hasa most comprehensive website. It serves the local community and isan information gateway for the rest of the World - and a window out-

wards for Cambridge. A model of a sub-regional network, twinned with Munich and other key cluster centres. Its importance assistingthe progress towards sub-regional and community coherence has beenvery significant.

ERBI - Eastern Region Biotechnology Initiative and Biologyin Business (BiB)

Two independent organisations which work together in the life sciencessector. ERBI is the regional industry association for biotechnology(250 regional member companies from the large Cambridge biotechnol-

ogy cluster) and BiB is a Cambridge based and student run national



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body with 1,500 members - promoting bioscience in business. Bothrun events, provide advice and services to members and contribute to

the health and growth of the cluster and the sector - with a strongregional focus.There are numbers of other networks. The appendix Websites (see

1.12) has a more complete list.In summary, the support structures are very well developed for

assisting company creation and early stage growth. Possibly betterthan most other centres in Europe. There are interesting model struc-tures which could be regarded as incipient best practice - many easilyadopted / migrated to other areas (which has been achieved within theUK already - from Cambridge).

1.8 Governmental Support

The UK Government (Prime Minister Tony Blair and Chancellor of theExchequer Gordon Brown) has been very supportive of innovation andentrepreneurship. New business creation is recognised as a criticalelement in sustainable economic growth, and knowledge based busi-nesses have been afforded priority in many ways through evolving gov-ernment policy.

Support and encouragement has been forthcoming through :-

Fiscal policy - to encourage informal investment (angels) and pub-

lic investment in new economy companies - especially early stage

Grant schemes to encourage entrepreneurship and invention (eg.Smart Awards)

Investment in entrepreneurship centres around the UK (Cam-bridge received 3m to start one such in 1999)

Major international partnerships funded - eg. Cambridge-MIT In-stitute (CMI) - major government funding into this cross Atlanticinstitute of research, learning and best practice - all focussed oninnovation and knowledge transfer (it may not yet have fulfilled

promise, but must be cited as governmental Support)

Government money invested in seed funds and regional venturecapital funds, including University Challenge Seed Funds

NESTA - the National Endowment for Science, Technology andThe Arts. With an endowment from the National Lottery, moneyfrom NESTA is invested in young innovation-based companies

Flexibility in a number of the schemes to permit grant, loan orequity investing by the established funds (eg. NESTA)

1.8. Governmental Support 2nd April 2004


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Open encouragement through national and regional programmes,promotions and events - of entrepreneurship and business cre-

ation Establishment of UK Incubation - national organisation, and sup-

port through regional funding of a large number (more than 300)incubators and innovation centres

Significant policy and moral support from government depart-ments and individual ministers (eg. Lord David Sainsbury - Min-ister for Science and Technology). Significant time and resourcefrom such government departments on information exchange anddissemination, Reports, studies etc

1.9 Non Governmental Organisations (NGOs)

Cambridge has a plethora of networks and organisations established tostrengthen the strong bond of community and common purpose, whichhas developed over a period of 40 years and more. The CambridgeNetwork, ERBI and Biology in Business have already been mentioned.The most notable other examples include:-

Cambridge and Europe Technology Club

CHASE - Cambridge Association of High Technology Small and

Medium Enterprises

Regional Innovation Society

Royal Society for Arts, Manufactures and Commerce

Cambridge University Entrepreneurs - CUE

Junior Chamber Young Managers Group

Cambridgeshire Small Business Group

I 10 university network - 10 universities in the region involved

in best practice exchange.

Cambridge Enterprise Conference - major international event runby Cambridge University and business people - as an independentoperation to promote The Spirit of Enterprise.

O2C- Oxford to Cambridge Arc. A newly established, active network, to link two great centres of science, technology, learningand invention - and to embrace and include ALL the surroundinglocations and communities.

1.9. NGOs 2nd April 2004


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Cambridge to Ipswich Corridor and IP City- linking Cambridgeeastwards - as the O2C does westwards, to Ipswich, home of

British Telecom Research and Development - and more major sci-ence park activity. Strong focus on telecommunications sector.

1.10 International Networking

Cambridge is engaged in numbers of international partnerships, col-laborations and networks. Significant examples :-

CMI- Cambridge-MIT Institute. Supported by large amounts ofgovernment money - a linkage between Cambridge University andMassachusetts Institute of Technology (MIT) in Cambridge Eng-

land and Cambridge Massachusetts,USA respectively. Focus isknowledge management and transfer. Work embraces research,information exchange, new business creation, student exchanges- and much more. Has been in operation for three years now

Strong linkages with Stanford University, California USA

Close to Babson College, Massachusetts

Close to INSEAD at Fontainebleau just outside Paris in France

Through various individuals and networks, like Cambridge Net-

work, links with Munich, Sophia Antipolis, Tel-Aviv, Montreal, Ot-tawa, Leuven (Louvain), Vienna, Paris, Uppsala, Barcelona, NewZealand, in China - Xiamen, Beijing, Shanghai, Hong Kong andwith Singapore and Taiwan. Also Sydney, Australia and Dublin,Ireland.

Cambridge is closely linked with all major UK centres of learningand R&D - most especially, beyond Oxford, York (Science City), Bris-tol, Glasgow, Edinburgh in Scotland, Durham, Nottingham, ImperialCollege London and University College London.

1.11 How to contact the cluster

Primary contact and UK sponsor of the Innovation Champions Networkis:-

THE LIBRARY HOUSE LTD.Kett House, Station Road,Cambridge CB12JXTel: +44 (0)1223 500550.Email: [email protected]: http://www.libraryhouse.net/

1.10. International Networking 2nd April 2004


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Other contacts also at Library House:Douglas Richard [email protected]

Charles Cotton [email protected] Nace [email protected] Littlewood [email protected]

Alan Barrell may also be contacted on:+44 0788 764 4597 and +44 1223 416466 / 249597

1.12 Appendix: Websites

The Babraham Incubator: www.babraham.co.uk

Babraham Institute: www.babraham.ac.uk

Biology in Business: www.BiB.org.uk

Cambridge Enterprise Conferences: www.cambridgeenterprise.co.uk

Cambridge e-Science Centre: www.escience.cam.ac.uk

Cambridge Futures Project: www.hop.co.uk

Cambridge Technopole Group: www.stjohns.co.uk

Cambridge University: www.cam.ac.uk

Cambridge University Local Industry Links:www.clo.cam.ac.uk

CHASE - High Tech Small Enterprises Association: www.chase.org.uk

ERBI: www.chase.org.uk

Eastern Region Biotechnology Initiative: www.erbi.co.uk

European Bioinformatics Institute: www.ebi.ac.uk

European Molecular Biology Laboratory: www.embl.de

Institute of Nanotechnology: www.nano.org.uk

The Library House Ltd: www.libraryhouse.net

Nanoscience Building Cambridge: www.nanoscience.cam.ac.uk

St Johns Innovation Centre: www.stjohns.co.uk

UK Human Genome Mapping project: www.hgmp.mrc.ac.uk

The Cambridge Network: www.cambridgenetwork.co.uk

Website of Biotechnology Industry Association: www.bio.org

1.12. Appendix: Websites 2nd April 2004


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Bibliography

[Bar01] Alan Barrel. Public Presentation, May 2001.

[Bar03] Alan Barrel. Emerging biotechnology clusters. Biology inBusiness website, 2003.

[Bea03] Alan Barrell and PACEC et al. The Cambridge Phenomenon Fulfilling the Potential. Technical report, Greater Cam-bridge Partnership, 2003.

[ECoAU01] Echenique, Cannanon, and Dept of Architecture UoC. Howshould Cambridge Develop into the Next Millenium. Tech-nical report, Cambridge Futures Group, 2001.

[His04] Peter Hiscocks. Cambridge enterprise and cambridge cen-tre for entrepreneurial learning - a status report. Lecturenotes from Munich delegation visit February 2004, 2004.

[Hou03] Library House. The Cambridge cluster report. Cambridge,2003.

[Par85] Segal Quince Wicksteed Partnership. The Cambridge Phe-nomenon Report. Technical report, SQW Ltd., 1985.

[Par00] Segal Quince Wicksteed Partnership. The Cambridge Phe-nomenon Revisited Report. Technical report, SQW Ltd.,2000.

[Sai99] Lord Sainsbury. Biotechnology clusters. Technical report,

UK Government (DTI), 1999.

[TP01] Roger Tym and Partners. Implementing the sub - regionalstrategy. Technical report, Roger Tym Partners in Associa-tion with Greater Cambridge Partnership, 2001.

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