Commissioned research examines the economics of providing commercial space for high-potential firms and highlights non-traditional funding routes as opportunities through which future development could be supported.
Business and academic member organisation, Cambridge Ahead, today published the findings of its latest research into the provision of commercial R&D space for life sciences in the Cambridge area. The report, authored by Nick Mansley, Cambridge Real Estate Research Centre, University of Cambridge, is designed to be read in conjunction with David Gill’s recently updated paper on ‘Cambridge Incubator Space – Engineering, IT & Digital’. The report, a ‘Review of Web Lab Space and Incubator Space for the Life Sciences in the Cambridge Area’ was commissioned to help understand the landscape in this area and examines the economics of this type of commercial space and the costs associated with supplying it. The report was kindly sponsored by AstraZeneca, Bidwells and Howard Group.
Cambridge is a globally competitive location, which has, and continues to experience a phenomenal rate of growth. In 2015-16 the growth of Cambridge companies and organisations, registered and trading in Cambridge, was around 7% on a one, three and five-year view, global turnover increased by 7.6% to £35.7bn, up from £33bn the previous year, and global employment grew by 7.6% to 210,292. Turnover and employment in the life science sector grew by 32.1% and 10.5% respectively.*
The Cambridge sub-region is in a unique position in the UK and Europe in terms of life sciences and related knowledge-intensive industries. The life sciences cluster effects are substantial with companies’ desire to locate here driven by:
The associated wet lab space market and the availability of appropriate space will play an important role in the vitality of the sector. The report highlights these challenges, which could, if not addressed, affect the future growth of the sector, namely:
There is a recognition of the issues in ensuring there is sufficient space for new and small businesses in the life sciences across the main providers of space in the sub-region and a willingness to collaborate/co-ordinate with other organisations to find ways to address the viability gap in the supply of additional space.
The provision of suitable, flexible workspaces for high potential firms across all sectors, including life science, engineering, IT and digital, is critical to continue feeding the pipeline of disruptive, innovative, fast-growing companies that Cambridge has established a global reputation for nurturing. Incubators are facilitators – rather than originators – of wider commercial success. Taking a longer-term view, where possible, and thinking innovatively about non-traditional funding routes could offer solutions to the potential bottleneck in supply. For example:
Andy Williams, Vice President, Cambridge Strategy and Operations, AstraZeneca commented: “We were pleased to support this important research into securing provision of wet labs for early stage companies within the life sciences ecosystem in the Cambridge region. It is in line with the recently published Life Sciences Industrial Strategy recommendations on how clusters need to be supported.”
Dick Wise, Partner, Bidwells said: “Clusters work at their best when start-up businesses and more established companies can interact and collaborate fluidly with each other. This report correctly highlights that traditional funding models often don’t work for early stage companies because the short-term nature of their businesses means their finance options can sometimes be limited. However, creating innovative solutions to seemingly difficult problems is absolutely what Cambridge does best and we are delighted to support a study which furthers the debate around how Cambridge and government can best support the life sciences sector.”
Nicholas Bewes, Chief Executive at Howard Group, added: “We are invested in helping shape Cambridge’s long-term growth and prosperity and believe that research such as this can have a huge impact in influencing change. We are focused on meeting the demand for purpose-built space in the life science sector to enable the city to continue to retain and attract the most dynamic global businesses. Cambridge is a collaborative community that understands its joint responsibility to safeguard the city's future. We hope this report provides the knowledge and insight to allow us to work together more effectively to remain globally competitive.”
Jane Paterson-Todd, CEO, Cambridge Ahead concluded: “This research, in conjunction with David Gill’s paper, provides invaluable comment on the economics of supply in wet lab and incubator space. More specifically, it will it will feed directly into the strategic work we are currently undertaking, to model growth patterns in the Cambridge area. Recognising the challenges from this well documented research, allows us to consider appropriate solutions and act upon them. Cambridge is a vital and unique economy in the UK for life sciences and technology and Cambridge Ahead is committed to finding solutions to continue its sustainability.
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