The 'Oxford-Cambridge Arc' has the potential to create up to 1.1 million new jobs by 2050 if the required new infrastructure is delivered, according to new research from Savills. An additional 9.6 million sq ft of office and R&D floor space, plus the delivery of 69 million sq ft of warehouse accommodation, will be needed to facilitate this growth.
The original 'Oxford-Cambridge Arc' initiative dates back as far as 2003. Set up by three Regional Development Agencies, it was created to promote and accelerate the development of the unique make-up of the region best known for its world-class education and research and development (R&D) capability.
16 years on, and it has yet to materialise. However, spanning more than 26 district and unitary authorities (including towns and cities such as Milton Keynes, Northampton, Bedford, Luton, Aylesbury, Oxford and Cambridge), and five Local Enterprise Partnerships, this comes as no surprise, especially with the added bureaucracy of such a vast project.
The expansion of the region is likely to be driven by the business sectors that have attracted the most investment in recent years, most notably pharmaceuticals, cybersecurity, automotive and biotechnology. At present, Oxford and Cambridge lead the charge as both cities are already home to several clusters of world-leading industries and consequently attract the largest share of private equity and venture capital investment. Yet the delivery of additional floor space in locations such as Bedford and Milton Keynes means we should start to see a proliferation of corporate investment and capital raising/funding in the future.
Encouragingly, the research shows that in 2019 the region has already received significant levels of funding, rising from £10.2 billion in 2018 to £27.4 billion, a 170 per cent increase to the end of Q3 2019. In terms of venture capital, this has risen from £861 million in 2018 to £1.076 billion in the same period, a 25 per cent growth rate despite high levels of political uncertainty in the UK.
Why does the money matter? Steve Lang, director in the Savills research team, commented: "Essentially, an increase in overall investment into the technology, industrial and life science sectors within the Arc is a strong indication of potential future real estate requirements. As we know, however, one size doesn’t fit all, and it will now be about providing choice in terms of scale, price points and locations when it comes to commercial space to cater to, and facilitate, this growth."
"For many, the Arc is about cutting journey times between the key centres within the region, but we also need to look at its potential from a global perspective. Ultimately, the success of the Arc will be determined by the growth of competing locations across the world. Therefore, getting it right is crucial to both attracting and retaining existing industries as well as encouraging more nascent sectors to grow significantly in the future."
"We have all the ingredients to create a new tech and innovation cluster that can ultimately compete on a global scale, all we need to do now is join the dots and encourage the flow of capital, intellectual property and people, and enhance corporate and educational interaction."
A review of the Global Innovation Index 2019, compiled by Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO), with a focus on global health, shows the relative strengths of 129 economies, of all scales. The ‘best’ Science & Technology clusters using scientific publications and patent filings under the WIPO data for Patent Co-operation Treaty (PCT) shows where the UK sits, but more specifically, Oxford and Cambridge.
Both cities are in the top 100, with Cambridge 58th, nestled between Rome and Sao Paulo; Oxford in 71st place between Delhi and Vancouver (The other two UK clusters in the top 100 are London at 15th and Manchester at 92nd). Both Oxford and Cambridge have not moved in the rankings, whereas almost all Chinese clusters moved significantly up the rankings. Strengthening of the Arc has the potential to push UK locations higher, eventually challenging for a top 10 place.
Lang added: "It is clear that for the life science cluster in the Arc region to compete internationally there needs to be greater collaboration between major centres. There are localised initiatives which are improving connectivity between research and industry, although this needs to be expanded across the region. The Life Science Sector Deal 2 ambitions include the UK being the world’s most innovative economy. The collective strength of the Arc’s Life Science cluster can help achieve this objective if there is sufficient collaboration, and the physical connectivity of the region improves."