Cambridge City Region: Creating a model for innovation and sustainable economic growth

28/07/2023

The UK government has consistently emphasised the importance of investment in innovation to create a robust and agile economy. In this regard, the Cambridge city region is an exemplar of innovation, poised to maintain and further strengthen its position as a beacon of local economic growth with far-reaching national and global influence. The latest data from Cambridge Ahead reveals that growth in the Cambridgeshire and Peterborough region outpaces the national economy. The primary driver of this growth is the innovation economy within the Cambridge city region, which stands out as the fastest growing in the area. The analysis, covering the period from 2010 onwards, highlights the robust growth of knowledge-intensive (KI) sectors, which consistently demonstrate strong performance year after year. While non-KI sectors have exhibited weakened growth in the latter half of the period, they have grown steadily throughout most of the period. Importantly, non-KI sectors in this region perform better than the national average, indicating that the success of the innovation economy boosts the wider economy and other sectors locally.

Business parks and clustering are key to fostering our innovation economy.

The study, conducted for Cambridge Ahead by the Centre for Business Research (CBR), emphasises the pivotal role played by business parks and clustering in fostering innovation within Cambridge. The researchers focused their examination on 37 key parks, showcasing their significant impact. Collectively, these 37 parks invest an average of £2.4 billion annually in research and development (R&D) activities, accounting for 44% of the £5.4 billion corporate R&D spending in the entire East of England region, as estimated by the ONS. This underscores the substantial contribution of the Cambridge city region to the innovation landscape both regionally and nationally.

Within the examined parks, there are 2,400 companies providing employment opportunities to over 50,000 individuals. Notably, twenty parks with a strong focus on KI sectors emerge as the primary drivers of innovation, accounting for an impressive 65% of the total employment within the 37 parks. Specifically, five major life science parks (Babraham Research Campus, Cambridge Biomedical Campus, Chesterford Research Park, Granta Park, and Wellcome Genome Campus) alone contributed 59% of the total R&D spending in the region during the 2021-22 period. These parks also exhibited a remarkable average employment growth rate of 16% (unweighted), far exceeding the average rate of 5% observed across the 37 business parks in the last three years.

The life science parks in the region have become hubs of scientific research and development, driving advancements in healthcare, pharmaceuticals, and biotechnology. This is demonstrated by their contribution to the global response to the COVID-19 pandemic and other advancements in health research. The Babraham Research Campus stands as a remarkable example of co-locating biotech companies alongside an academic institution, the Babraham Institute. This arrangement nurtures a collaborative environment, bringing together over 60 biomedical organisations and forging stronger ties between academia and the commercial sector. Research led by the Cambridge Economic Associates unveiled the significant impact of the Campus on the commercialisation of life science research and the expansion of the life science knowledge base. By providing specialised facilities to high-risk, early-stage companies, the Campus provides an environment that has attracted over £1.2 billion in commercial investment. In addition, The Wellcome Sanger Institute, located in the Wellcome Genome Campus, continues to push the boundaries of genomic research through cutting-edge collaborative innovations, as evidenced in a recent publication by researchers from the Institute on breakthrough therapy that will revolutionise cancer treatment in children.

These collaborative environments solidify the Cambridge city region's position as a leader in scientific innovation. 

Cambridge's unique advantage in business-academia collaboration.

The Cambridge ecosystem holds a distinct advantage due to its proximity to the highest rated higher education institution in the United Kingdom and displays a rich and dynamic exchange of knowledge, ideas, and expertise. This geographical advantage to the University of Cambridge plays a fundamental role in the success of the companies located within the business parks. This vicinity provides companies with unparalleled access to a vast pool of top talent, ensuring a steady stream of highly skilled individuals. Further, data from the CBR highlights the contribution of other non-corporate research institutions to the vibrancy of the Cambridge Cluster. Over the period between 2012/13 and 2021/22, employment in 34 of these institutions has increased by over 43%, indicating their noteworthy impact on the job market and economic growth.

Through various channels such as research partnerships and knowledge-sharing initiatives, businesses in the Cambridge Cluster benefit from the cutting-edge research, innovative thinking, and intellectual capital generated by the academic community, while academia gains valuable insights into real-world challenges, allowing them to align their research and educational programmes to address industry needs effectively.

Expanding clusters beyond the core city into the wider city region.

An examination of the Cambridge ecosystem shows that both life science and ICT clusters have historically been concentrated in the city centre, as the maps below show.

While there has been a growing dispersion of businesses within the Cambridge city region, extending beyond the city centre to areas like St Neots, Huntingdon, and Biggleswade, the data shows that this has been gradual and requires a more deliberate effort from companies and policymakers to ensure that clusters reach more peripheral parts. Promising initiatives already underway demonstrate a commitment to this goal. Notable examples include the establishment of the Melbourn Science Park in Melbourn, where companies like Bruntwood SciTech are actively engaging with the local community. Through their digital training programmes, they aim to enhance the skills of residents and foster inclusive growth. 

The Cambridge Science Centre has also initiated community engagement sessions in Chatteris, hosting their PopUpScience Centre at the North Cambridgeshire Training Centre. Additionally, Cambourne Business Park, providing space to 60 organisations in the science and technology industries, brings businesses closer to the community in its South Cambridgeshire location.

These efforts play a vital role in building connections between businesses and local communities, contribute to developments in local education and training systems, enhance the visibility of apprenticeships, and ultimately advance social mobility. By spreading the benefits of clustering, including wealth and opportunities beyond the city centre, these initiatives contribute to a more inclusive and equitable regional development.

Policies focused on collaboration and exchange between KI and non-KI sectors are key to inclusive growth.

The Cambridge ecosystem demonstrates a strong link between academia and industry, thus KI and non-KI sectors. As the CBR researchers conclude, growth in the KI sector is supportive to non-KI growth. Therefore, to ensure a more equitable distribution of opportunities, it becomes imperative to promote policies that facilitate collaboration, knowledge exchange, building links across sectors, and between cities and their market towns. Encouraging collaboration between clustered and non-clustered businesses can foster innovation and the sharing of ideas, which can be achieved through joint projects, networking events, and industry-academic partnerships. In addition, investing in skill development programmes and education initiatives can ensure a well-equipped workforce for both KI and non-KI sectors. This can enhance opportunities for non-KI businesses and foster inclusive growth, resilience, and long-term prosperity in the entire region. Developments in the Cambridge City region are indicative of the possibility of these goals being achieved in the short, medium, and long terms.

Find out more about the Cambridge Cluster Insights here.

Written by Chilombo Musa
Policy and Research Officer, chilombo@cambridgeahead.co.uk