Coming Up Fast - How the biotech gold-rush came to Cambridge. The explosion in business start-ups has reshaped the university town gives it the nation's highest ratio of entrepreneurs to its workforce. Al Senter looks at the roots of its thriving industry.
Success can be such a worry. Ask Brian Human, assistant director of planning for Cambridge City Council. He has to come up with 96,500 new dwellings by 2016 - half of which must be built on new land yet to be found. But, he concedes, the pains of growth are preferable to those of decline. Cambridge, the only world-class city where cattle graze 300 yards from the centre, within earshot of the choristers at King's College Chapel, is the current equivalent of a gold-rush town.
The population of Cambridge will swell by nearly a third in the next 20 years, says the Office of National Statistics, encouraged by a local economy that has been growing at a rate between 5% and 8% a year since the end of the last recession.
The entrepreneurial expansion known as the 'Cambridge phenomenon' shows no sign of letting up. In 1997, there were 11,631 business start-ups in the area. In a workforce of 365,000, up to 17% are reckoned to be entrepreneurs, which is well above the 1% to 4% average across the rest of England and Wales, says Richard Roberts of Barclays Bank's economics department, who completed an entrepreneurial survey of the UK last year.
Local business start-ups are no doubt spurred on by the successes of a triumvirate of serial entrepreneurs: Hermann Hauser, Chris Evans and Peter Dawe. Hauser, the founder of locally grown Acorn Computers (recently renamed Element 14), is now involved in a £50-million, high-tech venture-capital company, Amadeus Fund. Later this year, he will open an enterprise centre in Cambridge for undergraduates wishing to prepare for business life, for graduates looking to develop the commercial application of an idea, and for existing entrepreneurs in need of a business health check.
Evans has had successes with several local start-ups including the biotech companies Celsis and Chiroscience. He, too, is pursuing a venture-capitalist role with the Merlin Fund.
Dawe, whose company Unipalm Pipex went public in 1994, is now keen to develop a 'new' Cambridge bristling with intellectual and commercial activity.
Inevitably, everybody wants a piece of the action, and investment is pouring into Cambridge. It has received £7 million from Intel in the last year, and a further £2 million has been promised by the Thatcher Foundation to set up a university professorship in entrepreneurial studies. More significantly, Microsoft is investing £50 million in Cambridge in its first research lab outside the US.
So what is giving Cambridge this kind of pull? In the words of Nathan Myhrvold, Microsoft's chief technology officer, it has a 'well-deserved reputation and rich history as a leading research centre'. Sir Isaac Newton, Charles Darwin, Stephen Hawking and the likes of Francis Crick and James Watson, the pair who pioneered research into the structure of DNA, have all helped to build Cambridge's worldwide intellectual credentials. The neutron and the electron were discovered there, and its celebrated Cavendish laboratory has produced no fewer than 22 Nobel Prize winners.
The relationship between the university and business remains a cornerstone of the current entrepreneurial expansion. 'The university has always been very liberal in allowing individuals to own intellectual property rights within their terms of employment,' says Bill Wicksteed, of economic development consultants Segal Quince Wicksteed. 'It has profited from this attitude, in that it can attract world-class people while paying only UK salaries, and this breeds a sense of mutual obligation.'
The university has been instrumental in developing the local business infrastructure, largely because it is the principal landowner in and around the town. In the late 1960s, Trinity College was the first to transform a brownfield site on the edge of Cambridge into a business park. That was followed in 1970 by the 130-acre Cambridge Science Park and, in 1987, by the St John's Innovation Centre. The county is now teaming with developments such as the Regus Vision Park at Histon, the Babraham Institute, the Cambridge Research Park and, from next year, Granta Park.
The business parks have led to a clustering of talent, which has produced some of the most exciting commercial applications in science, technology and, particularly, biotechnology in recent years. According to research by Segal Quince Wicksteed, there are now 34,000 jobs in high-tech industries in the UK and 78% of them are found in Cambridgeshire. One in four quoted British biotech companies are situated in the area.
Imutran is just one of the innovative companies to spin out from the university. Today, pig organs produced for transplantation into humans are a reality but, back in the early 1980s, David White and fellow surgeon John Wallwork had difficulty sourcing funding within academia for their research. It 'not only sounded pretty crazy but was also very expensive', admits White, Imutran's director of research and development. 'We couldn't get the sort of capital we required from the usual research bodies and so we turned to venture funding.'
Since setting up Imutran with businessmen Ian kent in 1984, White and Wallwork haven't looked back. In 1996, it was snapped up by California-based Novartis Pharma AG - a usual occurrence for a pioneering Cambridgeshire biotech venture. Large multinationals acquire or form licensing partnerships with these companies, saving a fortune by investing only in the later stages of R&D. White and his team have remained with Imutran in Cambridge, where they can access a steady supply of 'well-qualified, very intelligent biologists', says White.
It is the easy access to good labs and the flexibility of short-term leases that appeal to Ian Cubitt, director of Axis Genetics, a company that has developed vaccines to fight diseases such as hepatitis B. The proximity to other biotechnology companies in the Cambridge area is another reason to stay.
'It's good to have easy access to practical networking,' says Cubitt. 'You bump into people all the time with whom you can share ideas.' Others are less sure about the benefits of working in such proximity to peers. 'Working in a cluster can be a double-edged sword,' says Martin Collett, the commercial director of CeNeS. 'A product succeeds or it fails and there's nowhere to hide. A cluster can be very public.' CeNeS is not a part of the scientist-turned-businessman school. It was founded by serial entrepreneurs with backgrounds in consultancy and pharmaceuticals who wanted to develop a revolutionary software to detect neurological conditions such as Parkinson's or Alzheimer's in their early stages. Although a Cambridge location was almost incidental, Collett recognises the benefits of remaining in the town.
'People like coming to Cambridge because of its 800-year history and because they feel at home here,' he says. 'It combines the population of a town with the conveniences of a city.'
But Cambridge is no paradise on earth for the enterprise culture. 'It's no cosy cartel,' says John Sime, chief executive of the Bio Industry Association. 'What characterises clusters is ferocious price competition.'
Competition is particularly fierce for financing and multinational partnerships, says Roger Quince of Segal Quince Wicksteed, the force behind the Granta Park development. A mentality of 'develop it and sell out' is common. 'Teams may form but they don't seem to stick together for too long,' he says. 'There's a falling out between partners, and one leaves and sets up on his own, hoping to imitate the others who have made pots of money.'
Clusters may explain how things have developed in Cambridge but not what will happen in the future, he says. An increasing hunger for land for housing and commercial development is likely to encroach on the city's green belt. Guy Mills, economic development officer for Cambridgeshire, predicts a tapering off in the rate of growth. But he is upbeat. 'It will be more a case of consolidation than expansion,' he says. 'We want the golden goose to keep laying and not to fly away. We want to retain the historic core of Cambridge, which means that the green belt will become more of an issue.
'The question is - is green-belt policy still a relevant planning tool or does it now have a stranglehold on the city, preventing the kind of sustainable expansion it needs?
- Cambridge has the highest ratio of entrepreneur to its workforce in the UK. Among them is David White, one of the founders of Imutran in 1984.
- In 1997 there were nearly 12,000 business start-ups in Cambridgeshire.
- The local economy has grown by up to 8% a year since the end of the last recession.
- Microsoft is investing £50 million in Cambridge in its first research lab outside the US.
- Cambridgeshire has 78% of the UK's 34,000 high-tech jobs and 25% of quoted British biotech companies.
- It is home to a triumvirate of serial entrepreneurs: Hermann Hauser, Chris Evans and Peter Dawe.
- The university's academic achievements include the discovery of the neutron and the electron, as well as 22 Nobel Prize winners at the Cavendish laboratory.