TENS of thousands of jobs have been created, billions of pounds have been generated and a corner of Eastern England has become a world-renowned technological centre by just a small network of entrepreneurs, according to research by the University of Cambridge.
Businessmen such as Steve Barlow and Robert Swann, who recently sold their business, Alphamosaic, a developer of mobile phone media, to an American company for £65.6 million, have helped to transform Cambridge and its hinterland.
The findings, from the university’s Centre for Entrepreneurial Learning (CfEL), show that the networking opportunities created by being in the same city has been the vital part of Cambridge’s technological success.
According to Shai Vyakarnam, head of CfEL and an author of the report: “The research highlights the impact a surprisingly small number of individuals have had in the growth of the high technology sector and places the University of Cambridge and CfEL at the very heart of this thriving industry.
“Enterprise breeds enterprise at the most grassroots level and this research has wider implications for policymakers and development agencies.”
Although Cambridge’s grouping of biotechnology, software and IT companies, known as “Silicon Fen”, is considered one of the most important centres for technology in Europe, it is still dwarfed by Silicon Valley in California in terms of size, the number of business start-ups and venture capital funding. Only one company, ARM, which provides technology for digital products such as mobile phones and cameras, is considered to be a global leader.
Dr Vyakarnam says that a “seismic shift” occurred in the mid-Nineties that transformed Cambridge’s economic landscape. When Acorn Computers — a local company started by Hermann Hauser, one of Cambridge’s most celebrated entrepreneurs — signed contracts with big companies, it encouraged more academics and scientists to seek outside funding for their innovations.
The region boasts between 900 and 3,500 innovation- focused businesses that employ between 30,000 and 50,000 people. Research from Library House, a company that seeks out new innovations for venture capitalists, shows that the city is one of the main centres of technology innovation in Europe. It has the highest concentration of technology investment, attracting more than 25 per cent of Britain’s venture capital investments and 8 per cent of the total in Europe.
David Cleevely, chairman of the Cambridge Enterprise Conference, said that a lack of contact with other businesses, inflexibility in business planning and an inability to listen are the reasons why many new businesses fail.
DanioLabs is a business that has benefited from the experience of entrepreneurs. It identifies medications to treat conditions such as Alzheimer’s and epilepsy. When Paul Goldsmith, 35, founded the company in 2002, “Cambridge was the only place to do it”, he said. “I knew that the network of talented individuals and support would enable the business to take off. Even the investors were knowledgable about the industry and they could provide not just cash but experience as well.”
Dr Goldsmith raised £1.3 million in seed funding and the business has since grown from a two-person operation to 32.
How long can this technological Utopia last? There is a danger that as a business becomes successful, it will be snapped up by an American company in a trade sale — a common occurrence for a Cambridgeshire biotech venture. The new owner typically takes the intellectual property and closes the local operations.
Much of this is down to cultural differences: while the Americans fearlessly expand their companies, accepting any failures along the way, their European counterparts tend to sell out. Unless the “surprisingly small” network of entrepreneurs grows, enterprising centres like Cambridge may yet disappear.
