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9 Things You Should Know About Silicon Fen|
All around Cambridge, something of a phenomenon has sprung up.
In reference to Silicon Valley, it’s sometimes called Silicon Fen; the area around Cambridge is a natural marshy plain that has been artificially drained over the centuries, known as the Fens. For those who find the term “Silicon Fen” a bit naff, it’s also sometimes referred to as the “Cambridge cluster”. Either way, the name refers to the grouping of cutting-edge science and technology companies that have gathered in and around the city of Cambridge. It’s an area with extraordinary economic clout whose fortunes seem only to be improving. Here’s what you should know about it.
Exactly how many science and tech companies are based in Silicon Fen depends on how you define it – for instance, whether you define it by the CB postcode, or whether you allow a broader definition including more of the neighbouring towns and villages. But whatever your definition, there are over a thousand such companies here, ranging from brand-new start-ups with just a handful of staff, to companies such as ARM with over 6,000 employees locally. The companies represented include hardware companies, software companies, biotech and pharmaceutical companies.
While some of these companies are based in Cambridge itself, high rents within the city mean that most are based on the science parks that ring the city, such as Cambridge Science Park – founded in 1970 by Trinity College and credited with kicking off the Silicon Fen phenomenon – and its successors, including Granta Park, Cambridge Business Park and Melbourn Science Park. There are 25 science parks in total in the area. Competition exists not just between the companies to attract top workers, but also between the different science parks to draw in companies by offering the best possible working environment. And of course, that also means for people looking for jobs in these fields, Cambridge is a great destination with lots of options.
Cambridge is one of the fastest-growing cities in their world; its economic growth resembles that of a new Chinese city rather than an established European university town. The thousand plus companies of Silicon Fen bring in a total revenue of £14 billion every year. In 2004, Silicon Fen companies received 24% of all UK venture capital, and there’s no reason to believe that the investment flowing into the area has abated since then.
What is it that drives this huge growth, revenue and investment? There are a plethora of factors, but one particular advantage of a hub like this is that it’s great for workers. Working for a start-up is always risky because there’s a greater chance that it’ll fail than an established company, and if you’ve relocated your family to a new city for that job, that can be expensive for employees. But working for a start-up somewhere like Silicon Fen helps mitigate that risk, because if one start-up goes under, workers can still be reasonably confident of finding a new job at a different tech company nearby. And in turn, knowing that there is a good supply of talented and qualified workers in the area is appealing to prospective employers looking for a base. Nearly a quarter of all jobs in Cambridge are in Silicon Fen companies – a statistic that is all the more remarkable given the presence of the university and all the jobs required to support it, plus the sizeable tourist industry locally.
The foundation of Cambridge Science Park in 1970 is often treated as the inception of Silicon Fen. It’s the oldest science park in the UK, based on an idea developed in the USA in the 1950s, and encouraged by the government of the time that wanted universities to forge greater links with industry. Trinity College – Cambridge’s wealthiest college – had owned the land for the site since the 16th century, but what had been farming land had lain derelict from the post-war period until the Science Park was built. The concept took a while to catch on, but proximity to the university, particularly to benefit from the scientific research taking place locally, was enough to grow the number of companies on the park to 25 by the end of the 1970s.
And the presence of the university continues to spur growth in Silicon Fen. Investment is a big part of this; the University of Cambridge has invested more than a billion pounds in over 500 high-tech companies in the decades since the 1970s. Another factor is innovation; many of the start-ups locally have been founded as a result of the desire to develop a bright idea initially generated in the course of university research.
Up until the late 1960s, local planners had been opposed to industrial development around the historic city of Cambridge, but around this time, the popular mood began to change. In 1963, Harold Wilson – who would become Prime Minister in 1964 – gave a famous speech to Labour Party conference declaring that, “[the scientific] revolution cannot become a reality unless we are prepared to make far-reaching changes in economic and social attitudes which permeate our whole system of society. The Britain that is going to be forged in the white heat of this revolution will be no place for restrictive practices or for outdated methods on either side of industry.” This tapped into the spirit of the age, and under pressure from university researchers who wanted to benefit from local industry, local government became more willing to permit industrial development in the Cambridge area.
An interesting comparison can be made with the city of Oxford, where industrial development had been permitted for much longer; in particular, Oxford has been a centre for car production since the foundation of Morris Motors in 1910, and it remains the home of Mini. Oxford therefore already had its own local industry, while Cambridge had a clear gap in the market that the companies of Silicon Fen were able to fill.
“Angel” investors – investors who provide seed funding for start-ups, often in exchange for equity – have also played a significant role in establishing the companies that populate Silicon Fen. Cambridge hosts a community of more than 60 high-net-worth angel investors, called Cambridge Angels, and they help support promising companies while providing a steady hand to any wilder ambitions. They fund companies to the tune of £50,000 up to £500,000, though some companies have received more than this over multiple funding rounds.
But it isn’t just seed funding that’s in abundance here. Beauhurst reports that in the first half of 2018, Cambridgeshire tech companies raised £215.7m across 29 announced deals; and while a lack of venture funding used to be a weakness of Silicon Fen, Cambridge is now punching considerably above its weight in this area. In 2016, Cambridge garnered a third of the investment of London, even though London is more than ten times its size. Even digging down to specific London boroughs, Cambridge has a greater number of companies and a greater investment per capita.
By the railway station in Cambridge, Microsoft Research Cambridge sits virtually next door to Amazon’s Cambridge UK Development Centre – just 45 minutes from central London. And just down the road is Apple’s Cambridge office, which for a long time was kept under wraps to the extent that its logo didn’t even appear on the building. Alongside these international tech giants are international pharmaceutical companies such as AstraZeneca’s European hub, which is in the process of expanding into new offices near Addenbrooke’s hospital.
But there are homegrown companies here too. Some of the best known include Darktrace, which is an AI cybersecurity company with a market value of $1.25 billion, and Raspberry Pi, which produces single-board computers at extremely low prices (for instance, for use in teaching computer science), and which has sold 19 million of its computers worldwide. However, one of the most infamous tech companies with “Cambridge” in its name – Cambridge Analytica – only traded off the reputation of Silicon Fen, and always had its base in London. But there are significantly more niche companies based here as well; one local company that gives a sense of the area’s diversity and innovation is PitPat, which produces dog activity monitors – like a FitBit, but for your dog.
It’s not just that tech giants like Microsoft, Amazon and Apple are opening offices in the Cambridge area. They’re also actively looking for start-ups to acquire here, such as two artificial intelligence programmes aimed at answering questions in natural language – Evi, bought by Amazon in 2012, and VocalIQ, bought by Apple in 2015.
One distinct advantage of Silicon Fen compared with Silicon Valley is that while the cost of living in the area is undoubtedly high, it’s a good deal lower than in the Bay Area. The average rent in Cambridge is £1,300 a month, for which you could typically rent a two-bedroom house or luxury apartment. By comparison, the average rent in San Francisco is $3,735; even taking the exchange rate into account, the £1,300 that gets you a house with a garden in Cambridge won’t even get you a studio in San Francisco, and the rest of the Bay Area is not much better. That means that the same high-skilled worker is a lot cheaper to hire in Cambridge than in the Bay, and workers are more likely to be able to buy houses and settle down long-term as well, which reduces staff turnover.
While the UK’s best-known artificial intelligence company, DeepMind, is based in London, there are no shortage of companies specialising in this exciting new field in Silicon Fen. Alongside the companies already discussed and a host of start-ups with just a handful of employees, Samsung is planning to open a new AI centre in Cambridge with 150 staff. Beyond this, there are companies such as Five AI, BenevolentAI and Prowler all based locally.
The AI boom also overlaps with the medicine and pharmaceutical research going on in the area, as many pharma companies are investing in AI for drug development and research. And it’s a focus of research at the University of Cambridge, from the Cambridge Computer Laboratory working on the practical details of developing AI, to centres such as the Centre for the Study of Existential Risk and its sister centre, the Leverhulme Centre for the Future of Intelligence, which look into artificial intelligence from the perspective of its risks, opportunities and how government and industry should go about managing the safe development of this potentially dangerous technology.
It’s undoubtedly the case that the British tech industry is experiencing a brain drain. While Silicon Valley giants love the lower salaries they can pay workers here, for top tech professionals who don’t mind relocating, it’s clear that they can command higher salaries and potentially accelerated career trajectories by moving to work in the head offices of tech giants in the USA.
While Silicon Fen hasn’t solved the problem, it has mitigated it. The Cambridgeshire area has a lot to recommend it: good schools, more affordable housing than Silicon Valley (if still expensive by the standards of the rest of the UK), easy access to London or to the countryside, and good transport links into the rest of the UK and Europe. Coupled with the high numbers of tech firms looking for staff, this is an increasingly good place to settle as an ambitious tech worker. And of course, the more people who choose to settle here and establish their own companies, the more appealing it becomes as a hub. With lots of investment and companies keen to establish a presence here, Silicon Fen seems set to continue growing.
If you’re fascinated by tech and love the city of Cambridge, take a look at our Computer Science Programme for students aged 16 to 18. You can live, dine and study in colleges of the University of Cambridge, learning to code in three different languages.
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