Cambridge's £37billion economy and the need for evolution

The city's popularity as a world-class location for prestige businesses is soaring despite healthy competition from Silicon Valley, Munich and Copenhagen. But at what cost?

Construction law specialist Colin Jones – a board director of Cambridge Business Improvement District (BID) and managing partner of law firm Hewitsons – explores Cambridge’s booming economy and warns that our home-grown millennials could be victims of the city’s success.

The Cambridge economy is reported to be pumping out revenue of £37billion a year.

The arrival of AstraZeneca, whose new HQ is currently being built in the city, will add another £16billion onto that. That’s pretty serious turnover for what was, just 100 years ago, a small town with a well-established university attached to it.

Out of necessity, Cambridge has reinvented itself very successfully and is now an internationally recognised destination for hundreds of enterprises including mega-corps like Microsoft, Apple and Siemens.

But what makes Cambridge so attractive to businesses today isn’t just the fact that it’s the centre of technology, science, innovation, research and development, or a melting pot of amazing minds. For businesses employing high-calibre staff, handpicking a ‘good location’ from a choice of global environments is now high up on the priority list.

What makes a good business today isn’t just skills, finance, connectivity and communications; it’s additionally the infrastructure within which you are basing your business and expecting your people to work. And this is the key point. The manager of a business moving into town needs to be able to assure staff that they are relocating to a place which is safe, clean, inspiring and vibrant, with great shopping, restaurants, nightlife, culture and lifestyle. That’s what supports the attraction, the excitement, the buzz.

Simply put, high-quality people need high-quality environments. And bearing in mind the calibre of some of these people working in science, technology, medicine and research, they are in such demand across the world that, if the place isn’t right, if all the factors to enrich their lives aren’t there, they can and will simply go elsewhere. Therefore, getting the location right is optimum for businesses.

And, indeed, more and more businesses are wanting to move to Cambridge as much for its certain uniqueness and historical charm as for the thousands of cutting-edge tech and pharmaceutical companies already located here.

This is what led to AstraZeneca making the move from the North and what has brought prestigious corporations like Microsoft, Apple and Amazon to locate in the CB1 area close to the railway station.

Microsoft was originally located within the university’s West Cambridge research park, but its employees wanted to be in the centre of things. And we all know the stats: A happy workforce is a productive workforce. So offering easy access to transport systems – as well as the city centre shops and eateries – has huge appeal in terms of the environment that businesses are seeking to provide for staff.

Businesses also need to see that their employees are in a place which is responsive to what their people want. And this is where Cambridge Business Improvement District (BID) is doing an extremely good job as custodian of the city centre, ensuring that what makes it so attractive to people and businesses globally is not lost but enhanced.

As well as funding the ambassadors to welcome visitors and help them around a not terribly well laid out city, they sponsor the taxi marshals and street pastor patrols to help people feel safer at night, decorate the city centre at Christmas to create a festive atmosphere for visitors and have introduced other initiatives, including pavement deep-cleansing and graffiti/chewing gum removal, to look after the city centre. And businesses want that for their staff.

Now, more than ever, Cambridge BID needs to be looking after the city centre’s day and night economies because if there isn’t a clean, vibrant centre for these professionals to work and play in, these big internationals – and the smaller companies too for that matter – will simply go. And then where will we be, particularly post-Brexit?

There are, of course, other locations competing with Cambridge on the international stage, including Silicon Valley in northern California, which is far, far bigger than Cambridge, and the Greater Munich area in Germany, which also spreads over several cities.

Copenhagen, too, is interesting in that, like Cambridge, it has a historical centre but, in a typically ‘Scandi’ way, has dealt with its infrastructure in a rather planned fashion and now boasts more scope for growth than Cambridge.

Indeed, there has been much debate in recent years about whether Cambridge will ever be able to extend sufficiently to enable the growth that needs to happen while respecting what makes it attractive in the first place.

The university, of course, is at the hub of it all – the legendary architecture woven firmly into the city’s delicate infrastructure, making it impossible to divorce the two and requiring that development and growth are handled sensitively and carefully.

It’s a careful balancing act because we do need to be evolving and allowing the growth that is necessary to retain our international positioning. If we don’t, it may no longer be viable for businesses to operate effectively from Cambridge.

We also have to ensure that Cambridge remains a place for all and not just a place for the elite. One of the biggest issues that comes with being such a dynamic and attractive location is the problem of high rents and affordable quality housing.

Living and working in beautiful Cambridge now comes at a hefty price. It’s why some companies are paying £35 a square foot for office space in the city compared to £11 a square foot for office space in Northampton. And the impact on affordable quality housing is even greater.

When I qualified over 20 years ago, I could, as a junior, afford to buy a flat in town or a terraced house on Mill Road for around £40,000. The same terraced house now goes for £500,000, which is out of the price bracket for most youngsters starting out.

Inevitably, if you can’t afford to live within the city centre, you live outside of Cambridge; but then, if you’re living outside, you start to think ‘why even bother fighting the congestion to travel in? I may as well commute to London.’ And this is not just a problem for our business but all businesses that want to attract people at every level – the office junior as well as the company director.

Bigger environments like Copenhagen are much more aligned to ensuring a better infrastructure and excellent transport links in and out of the city centre. Cambridge’s challenge is to realise this too, because if businesses can’t get the right staff here, they will move to where they can.

One of the key reasons reported to be behind Microsoft’s relocation to the CB1 area was to be close to the railway station, recognising that places such as Ely and Stevenage offer more affordable dwellings for employees, who can then very easily transport themselves into Cambridge by train.

Similarly, AstraZeneca and the new Papworth Hospital, which will both be based on the Cambridge Biomedical Campus, are looking at funding a new mainline railway station on site which will enable their staff to get in and out, avoiding the notoriously congested Hills Road.

There is currently much debate about light rail systems through the city centre as well as systems going underground – all supported by Baron Mair, the former master of Jesus College, who was one of the chief engineers on the London Crossrail. Such a project would run into the billions, but being able to get from one side of the city to the other, without adding to congestion, would definitely be a positive.

We have a motto in our legal practice: What got us here won’t get us there. Which broadly means: We need to build on the past but we can’t be held back by the past. And, in many respects, the same is true for Cambridge.

There has been much debate in recent years about whether Cambridge will ever be able to extend sufficiently to enable the growth that needs to happen while respecting what makes it attractive in the first place

Inevitably, there is a myriad of change because the job market is ever tougher. In a full employment economy, such as we have in Cambridge, the recruitment and retention of quality talent and clients is a key issue for any business. And so, whether you’re Hewitsons or KPMG, we must all be anticipating the changing needs of the next generation.

We have lots of debates about what the ‘millennials’ are looking for – and they are not looking for the same things my generation responded to. Therefore, old structures and approaches need to be adapted.

Likewise, Cambridge must be prepared to evolve, building on the past and looking to the future to ensure we maintain our success on the world stage.