Silicon Fen

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Silicon Fen (sometimes the Cambridge Cluster) is the name given to the region around Cambridge, England, which is home to a large cluster of high-tech businesses, especially those related to software, electronics, and biotechnology. Many of these have connections with Cambridge University, and the area is now one of the most important technology centres in Europe.

It is claimed that Silicon Fen is the second largest venture capital market in the world, after Silicon Valley. In 2004, 24 % of venture investment in the UK and 9% in Europe was received by Silicon Fen companies, according to the Cambridge Cluster Report 2004 produced by Library House and Grant Thornton.

It is called "Silicon Fen" by analogy with Silicon Valley in California, and because of the large area of drained fenland to the north of Cambridge. The name is also a deliberate rhyme with "Silicon Glen", a pre-existing high-tech enclave in Scotland.

The so-called Cambridge phenomenon, giving rise to start-up companies in a town previously only having a little light industry in the electrical sector, is usually dated to the founding of the Cambridge Science Park in 1970: this was an initiative of Trinity College, Cambridge and moved away from a traditional low-development policy for Cambridge.

The characteristic of Cambridge is small companies (as few as three people, in some cases) in sectors such as computer-aided design. Over time the number of companies has grown; it has not proved easy to count them, but recent estimates have placed the number anywhere between 1,000 and 3,500 companies. They are spread over an area defined perhaps by the CB postcode (which is highly sought after), or more generously in an area bounded by Ely-Newmarket-Saffron Walden-Royston-St. Neots-Huntingdon.

In February 2006, the Judge Business School reported estimates that suggested that at that time, there were around 250 active startups directly linked to the University, valued at around US$6 billion.

Only a tiny proportion of these companies have so far grown into multinationals: ARM and Autonomy Corporation are the most obvious examples, and more recently Cambridge Silicon Radio has seen rapid growth due to the uptake of Bluetooth. The region does have one of the most flexible job markets in the technology sector, meaning that the same people are often retained in other companies in the Cambridge area after a start-up fails. One explanation for the area's success is that after a while such an employment market is self-sustaining, since employees are willing to move to an area that promises a future beyond any one company.

Another explanation is that because of the academic preeminence of Cambridge University, the extremely high standard of living available in the county, its closeness to Stansted Airport and London, the low incidence of social problems such as crime and hard drug use, many graduates from the university choose to stay on in the area, giving local companies an extremely rich pool of talent to draw upon. The high-technology industry has little by way of competition, unlike say in Oxfordshire where plenty of other competing industries exist. Because Cambridgeshire was not until recently a high-technology centre, rents were generally lower than in other parts of the UK, giving companies a head-start on those situated in other more expensive regions; this has, however, recently changed and Cambridgeshire now has one of the highest costs of living in the UK outside London.

[edit] References

The Cambridge Phenomenon: The Growth of High Technology Industry in a University Town, Segal Quince & Partners 1985, ISBN 0-9510202-0-X
The Cambridge Phenomenon Revisited - a synposis of the new report by Segal Quince Wicksteed, Segal Quince & Partners 2000, Download
The Cambridge Cluster Report 2003, Library House 2003, Download
The Cambridge Cluster Report 2004, Library House in association with Grant Thornton 2004, Download
The Cambridge Cluster Report 2006, Library House 2006, Download