ACS DIST

The 1998 Information Industry Outlook Conference

8:30am - 5:00pm Saturday 7 November 1998 - Canberra
Hosted by the ACS Canberra Branch, In Cooperation with DIST

Closing address: Building Arcadia

Tom Worthington

Emulating Cambridge's High Technology Industry Success in Australia

Tom Worthington

Immediate Past President of the Australian Computer Society

tom.worthington@tomw.net.au

See also: Printed paper & Slides for talk

Contents

Abstract

It is argued that Australia can cultivate a cultured high technology image to promote its information industries. The author's experience in assisting with the discipline review strategy for information technology in Australia is discussed. This is compared with results of research into factors for the success of Cambridge (England) as a high technology industry centre. Steps are suggested for Australian companies and governments to position Australian for an information economy future. Contrary to convention wisdom, it is argued that economic development comes from growth of local companies and though technology transfer to multi-national companies.

Introduction

Australia can cultivate a cultured high technology image to develop and promote its information industries. The raw material of IT is talented people in a stimulating environment. Marketing of the products they produce can also be helped by the cultural reputation of where they produce it.

Information Technologists tend to plan and theorise in the dispassionate languages of science. Investors and policy makers talk about IT R&D investment decisions in the dispassionate language of commerce. However, there are other powerful some motivations for decision making in information industries. Politicians and voters want a vision of what can be accomplished through IT. Researchers and investors considering where a research or development facility should be located, will be influenced by the reputation of the place. The customers of products  produced from the research will also be influenced by the cultural quality of a place it was developed.

Perceptions perhaps have also played a role in the lack of action on IT policy by Australian governments. While the needed actions have been detailed in expert reports, these did not use a language which business and government leaders understood.

This document discussed the results of one major work on IT policy, which the author was involved in preparing: discipline review strategy for information technology in Australia. This is contrasted with results of research into factors for the success of Cambridge (England) as a high technology industry centre.

Steps are suggested for Australian companies and governments to position Australian for an information economy future. Contrary to conventional wisdom, it is suggested that economic development comes from growth of local companies and though technology transfer to multi-national companies. One example of an Australian facility with the necessary technical and cultural elements to be a major R&D center is described.

IT Research Strategy for Australia

The report "Sink or Swim - Discipline Research Strategy on Information technology" was officially released 18 September 1998, by the Australian Academy of Technological Sciences and Engineering (AATSE 1998). It  examined the situation of research in Information Technology (IT) in Australia and aimed to show how the nation could gain increasing benefit from its investment in the discipline.

The report was commissioned to prepare a strategy for the development of research in information technology (IT) in Australia over the next 10-15 years. It was to make recommendations for research in IT disciplines, to strengthen their contribution to the economic, social and scientific welfare of Australia.

The report presents a vision of a healthy, productive and reputable program of research activity supporting Australian industry and society. However, it showed that reality falls short of this vision, with the scale of IT research in Australia is much less than is warranted by the importance of the discipline. The report argues engineering and information technology need the sort of support that agriculture and medical research receives in Australia, as the knowledge economy takes over.
The one hundred page report by government, industry and academic experts took two years to write.  It was funded by the Department of Employment, Education, Training and Youth Affairs, with additional funding and expertise from the ACS.

As a member of  the steering committee, the author's role was to push the academics along to produce the report on time and to make it of practical use. What was accepted was the importance of informal contact in research collaboration, the need for research resources not to be too thinly spread, and the need for industry collaboration to count in the reward schemes of academia.

Perhaps the most important point of the report is about the benefit which comes from the pool of skilled people which research provides: Transfer of knowledge into industry comes more from personal contacts and movement of personnel than it does from published information. Industry gains more benefit by employing highly trained individuals to carry out research and development than it does by reading the research literature.

Recommendations

The draft of the report had 25 recommendations (Worthington 1997). These were listed at the front of the report, in the order they occurred in the report. This made them difficult to grasp and I suggested they be collected into a smaller number and grouped by topic for the final report:

Topic Recommendations
Australian Government Funded Research 1 to 5
Australian Industrial IT R&D 6 to 11
Australian IT Research Education 12 to 15
National Focus on Information Technology 16 to 17

The following discussion refers to the recommendations as numbered in the report (and listed in Appendix A for convenience).

Australian Government Funded Research

The first group of recommendations covered recognition and rationalisation of research funding by the federal government. These aimed to provide coordinated and focussed research programs. To rationalise their funding mechanisms it was recommended Government funding bodies and research agencies have a priority setting process, similar to that of CSIRO (Recommendation 1).

There was no focus on IT research funding by the ARC; in response, recommendation 2 was to have a specific funding category called "Information Technology" and assess all applications in Computer Science, Computer Engineering, Software Engineering, Digital Communications and Information Systems under it.

Because of the importance of computer programs and systems to IT, recommendation 3 suggested these research contributions be recognised is assessing grants, rather than just counting how many papers the applicant had published.

Recommendation 4 covered international research collaboration. It was suggested DIST and DEETYA establish a funding mechanism to increase the collaboration and the ARC fund specific grants for Australian postgraduate students to visit overseas research facilities.

Areas were identified for Australian research organisations to participate in international consortia: International broad band communication networks and next generation Internets; Geographical and Spatial Databases; Intelligent Manufacturing Systems; High Performance Computing and Communications (Recommendation 5).

Australian Industrial IT&D

This section dealt with the issue of encouraging IT research for Australian industry sectors, where there are very few large locally owned companies to fund the research. To address the recommendation 6 was that 25% of the funding for CRCs should go to IT.

Australian universities should allow academics from IT departments to spend time working in industry and this should count for promotion (recommendation 9).

A World Wide Web-based registry of current research capabilities and activities, plus structured industry forums and workshops was recommended to improve the flow of information about the strengths in Australian IT research to industry (Recommendation 10).

Australian IT Research Education

The concern here was for better academically qualified students to be attracted into the IT at the tertiary level, to produce high calibre researchers. DEETYA and State Departments could encourage more high achieving school leavers to enter IT courses at the tertiary level. State Governments could improve IT curriculum and teacher competence at the primary and secondary level (recommendation 12). IT costs money in laboratories, equipment, software and technical infrastructure. It was recommended funding be equivalent to those applicable to the laboratory based physical sciences and electronic engineering (Recommendation 15).

National Focus on Information Technology

One Federal Government portfolio for the information industries, covering telecommunications, information technology and the media was recommended. This would provide a broad, coherent strategy covering all industry, commerce, education and research sectors (Recommendation 16).

Professional and industry organisations including the Australian Computer Society were asked to co-ordinate and conduct presentations on key IT issues including current research to the public and government bodies. The work of the National Science and Technology Centre and the Powerhouse Museum raising awareness was acknowledged (Recommendation 17).

Why was the Report Ignored?

The report "Sink or Swim - Discipline Research Strategy on Information technology" was extensively researched and backed by government and the industry. The report presents a vision of a healthy, productive and reputable program of research activity supporting Australian industry and society. It argues engineering and information technology need the sort of support that agriculture and medical research receives in Australia, as the knowledge economy takes over. Given such an important topic and well reasoned arguments, why has the report had so little impact?

"The Cambridge Phenomenon"

In the "Cambridge phenomenon", Segal Quince & Partners argue (Segal 1985) that the growth of high technology industries around Cambridge (England) came from informal contacts, modest locally arranged financing and organic growth from existing small independent companies. This report can be difficult to find (it predates the web), so I have prepared a summary at Appendix B.

The report argues that an ethos of self confidence of the University of Cambridge inspired start-up companies around the University. The ability to retain intellectual property rights allowed University people to try exploiting their ideas with new firms. The Cambridge Science Park was established to cater to the demand from firms, rather than create that demand. It initially provided low cost short term facilities to already established small companies.

This approach differs from that of Australian governments, which assume that high technology investment and know-how must be attracted from elsewhere, preferably from another country. The emphasis has been on attracting branches of large, established, national or international organisations, using marketing and financial packages targeted at company CEOs. It is assumed that economic development will come from these companies employing local staff and, in some way, from technology transfer to locals.

This cargo cult approach by Australian governments is not supported by the Cambridge experience. It can be argued that, with the growth of the Internet, Australia is well positioned to develop its own information industry to compete on the world market (Worthington 1997b). What might be lacking was self confidence by those in the industry, the business community and our political leaders to exploit local talent.

Examples of successful IT R&D at Cambridge, from a visit in 1996 (Worthington 1996b), include:

Marketing Australia for IT R&D

As well as well educated IT personnel and a suitable business environment, Australia needs to have a reputation for a suitable cultural environment. Whereas Cambridge obtained that reputation naturally, over a long history, Australia could cultivate one in a few short years.

While using the local market to develop products and sustain operations, Australian companies can market to the world. Parts of Australia have a similar non industrial character to Cambridge, with major cultural institutions. This can be built through deliberate marketing to create an international reputation as a cultural and innovation centre.

The Internet provides an ideal on-line marketing tool. Australia already has Internet sites, with international reputations and other centres which could be made world famous on-line, very quickly. These sites can be exploited to market Australia and create a reputation for culture and innovation in months, rather than centuries.

The IT industry and research community need to market not only the results of their work, but plans for expanding the R&D effort. The Australian IT R&D report failed by addressing only the R&D community in the dry language of science.

Australian Technology Park and Eveleigh Railway Workshops

An example of an Australian centre combining culture and technology is the Australian Technology Park (ATP) at the old Eveleigh Railway Workshops, in Sydney (Worthington 1998). This contrasts with the barren landscape and disappointments of the MFP Technology Park in Adelaide (Worthington 1997c).

ATP has considerable unrealised potential as a marketing tool for Australian R&D capabilities. In addition to high technology facilities, the site includes a railway workshop museum and a major music teaching and performance facility.

ATP, perhaps more by accident than deign, has similar elements to the City of Cambridge, for creating a marketable cultural and high-technology image.

ATP Technology Park

The Australian Technology Park involves the University of New South Wales, the University of Sydney and the University of Technology, Sydney. According to the ATP home page: The ATP is being developed by the Australian Technology Park Sydney Limited, with the support of the New South Wales State Government. The project has also received financial support from the Federal Government, under the Building Better Cities Program.

The ATP is located at Eveleigh, to the south west of the centre of Sydney, next to Redfern Station. The site is the refurbished Eveleigh Railway workshops. The workshop buildings have been sensitively upgraded to include modern new offices in the shell of the old.

The park aims to promote and assist the development of:

ATP has tenants from high technology companies, particularly in information technology and communications:

Eveleigh Railway Workshops

For the railway enthusiast the site is known for the historic Eveleigh Railway Workshops:

Nearly 20,000 men spent most of their working lives at the Eveleigh Railway Workshops in Sydney's Redfern; heating, thumping, shaping and crafting steel into huge, beautiful, steam locomotives and carriages. They serviced up to 70 locos at a time and built more than 200, which ran on track costing nearly £20,000 per mile, at a time (1870s) when the railways were uniting Australia. It was an age of unprecedented expenditure and prodigious output, of singular vision and tradesmen's pride."
Review of "Railways, Relics and Romance: The Eveleigh Railway Workshops", by Anthony Browell, 1996 Architecture Media Australia Pty Ltd.
Bleeck's first real success as a writer came in 1936 when a series of stories featuring the character Raggles, based on a rat catcher at the Eveleigh Railway Workshops where he worked, began appearing in The Bulletin. He also wrote for various newspapers and magazines including New Idea, Woman's Mirror and the Sunday Telegraph.
Pulp Fiction 'Sensational and lurid stories, articles, trash' arrive at the National Library, Press Release, National Library of Australia, 11 February 1998

Arcadia

Et in Arcadia ego
(Anonymous)
The Roman writer Cicero termed what we would call the cultural landscape a second nature (alteram naturam). This was a landscape of bridges, roads, harbours, fields - in short, all the elements which men and women introduce into the physical world to make it more habitable, to make it serve their purposes.
(Hunt 1992)

In closing the ACS Canberra Branch Conference in 1995, on Internet and multimedia, I drew a connection between 18th century English landscape architecture, the design of the city of Canberra and the information super highway (Worthington 1995).

In 1996 in the keynote address to the ACS Canberra Branch Conference I argued that Australia in general, and Canberra in particular, could become the world's leading centre for use of Internet technology for administration (Worthington 1996).

Perhaps we can build both the mystique and the reality of an IT Arcadian, using the technology to promote Australia as a place in which to develop high technology products and somewhere to buy them from.

Conclusion

Australia can cultivate a cultured high technology image to promote its information industries. The success of Cambridge (England) as a high technology industry centre, provides a model for Australia. The discipline review strategy for information technology in Australia provides a blueprint for out IT research. Contrary to convention wisdom, economic development in IT comes from growth of local companies and though technology transfer to multi-national companies. Australian companies and governments need to take steps to position the nation for in this information economy future.

References

Anonymous ? "Et in Arcadia ego - And I too in Arcadia" from the Oxford Book of English Quotation, Oxford University Press, 1979

AATSE 1998,  "Sink or Swim - Discipline Research Strategy on Information Technology", Australian Academy of Technological Sciences and Engineering, September 1998, URL: http://www2.atse.org.au/

Hunt 1992 Hunt, John Dickson. "Gardens and the picturesque: studies in the history of landscape architecture", Massachusetts Institute of Technology 1992. Introduction

Segal 1985, "The Cambridge phenomenon : the growth of high technology industry in a university town", Segal Quince & Partners, Hall Keeper's House, 42 Castle Street, Cambridge CB3 0AJ, England, 1985, ISBN 095102020X (copy in ANU HANCOCK Library)

Worthington 1995, "From Arcadia to Zeus: my first year on the Web",Chair's Closing Address, ACS Canberra Branch Conference, 13 May 1995, URL: http://www.tomw.net.au/conf95cl.html

Worthington 1996, "Canberra 1997: world information capital", Keynote Address, ACS Canberra Branch Conference, 20 April 1996, URL: http://www.tomw.net.au/twadd7.htm

Worthington 1996b, "Windsor and Cambridge, UK - Hi-tech tourist", T. Worthington, 18 November 1996 (revised 6 December 1996), URL: http://www.acs.org.au/president/1996/epubs/uk.htm

Worthington 1997, "Guide to the IT Research Strategy Draft Report, Tom Worthington, 9 August 1997 (Updated 10 August 1997), URL: http://www.acs.org.au/president/1996/drsit/overview.htm

Worthington 1997b, "Canberra: Cambridge or Thebes?", T. Worthington, 12 April 1997, URL: http://www.acs.org.au/president/1996/drsit/cmbrdg.htm

Worthington 1997c, "Visit to South Australia", T. Worthington, May 1997 (updated 4 June 1997), URL: http://www.acs.org.au/president/1997/travel/sa/

Worthington 1998, "Australian Technology Park & Eveleigh Railway, Sydney", T. Worthington, 11 May 1998, URL: http://www.acs.org.au/president/1998/past/atp/

APPENDIX A: Recommendations from IT:Sink or Swim?

Reproduced from "Information Technology:Sink or Swim? (AATSE 1998)

Australian Government Funded Research

Recommendation 1

In order to provide co-ordinated and focussed research programs aimed at disciplines that are most important for Australia’s future prosperity, the Federal Government must establish a national priority setting process for Australian research. Government research programs must also rationalise their funding mechanisms for research to avoid duplication. To this end the Federal Government must ensure that:
  1. all Government funding bodies and research agencies have a priority setting process, similar to that introduced by CSIRO;
  2. all Government funding bodies and research agencies should ensure that mechanisms for research are rationalised.

Recommendation 2

In view of the economic significance of IT and the size of the IT research sector, the ARC should clearly identify this category in its assessment panel structure and make the following changes:
  1. the names of the A4 sub-panel should be changed from Engineering 1 to Information Technology and the A8 sub-panel from Engineering 2 to Engineering;
  2. the new Information Technology sub-panel should assess all applications in the IT discipline including Computer Science, Computer Engineering, Software Engineering, Digital Communications and Information Systems;
  3. the new Information Technology sub-panel should be augmented with the appropriate research expertise in the Information Systems area.

Recommendation 3

In recognition of the nature of IT research, the ARC should consider the following changes to the implementation of their Large Grants Program:
  1. valuation of research proposals in IT should take into account other research contributions besides published papers;
  2. the assessors of grant applications should indicate on the assessment form their confidence level for assessing application;
  3. the ARC should implement the recommendations of the Bazeley Report to address the problems faced by young researchers in obtaining funding support for their work;
  4. because IT is an experimental discipline, the ARC should establish mechanisms to fund experimental IT research programs based upon recognised scientific principles and these programs should be extensible for a period of up to 5 years.

Recommendation 4

IT research needs to be conducted in a global context, and this together with Australia’s geographical position means that the focus on the importance of international research collaboration in IT must be increased. Government bodies should foster international collaboration in the following ways:
  1. DIST and DEETYA should establish an integrated funding mechanism to increase the collaboration between Australian researchers and international research groups;
  2. ARC should fund specific grants to allow Australian postgraduate students to spend a short time in an internationally recognised IT research facility;
  3. IT professional associations in conjunction with DIST and DEETYA should establish a "Distinguished Visitor" program in the IT discipline.

Recommendation 5

IT research is an engineering activity and requires significant levels of infrastructure support. In addition, a number of international IT research consortia are setting standards for information services, electronic commerce, and advanced manufacturing well into the next century.

 It is essential that Australian research organizations and industry participate in these consortia to allow our industry to build competitive products and services on this infrastructure. The Federal Government must invest in IT infrastructure and fund participation in these consortia. Areas of particular importance are:

Australian Industrial IT R&D

Recommendation 6

In recognition of the importance of IT research for all industry sectors and the structure of the IT industry in Australia with very few large locally owned companies, for the next round of CRC funding, the Minister for Industry, Science and Tourism should ensure that:
  1. IT is a priority area consistent with national priorities and that 25% of the funding for all CRCs should be based on the IT discipline;
  2. mechanisms are examined to increase the flexibility of CRCs to strengthen their applicability to IT.

Recommendation 7

In order to make small-to-medium business enterprises (SMEs) more competitive in the fast moving and highly innovative IT marketplace, the following initiatives should be taken:
  1. DOCA and DEETYA should investigate and establish additional mechanisms for facilitating research interaction between universities, research organizations and the IT industry;
  2. mechanisms should be established to provide sponsorship and coordination of testing and conformance facilities for SMEs.

Recommendation 8

To increase the profile and strength of industrial R&D in Australia, and to provide significant new employment and investment opportunities:
  1. the Federal and State Governments should strengthen investment and facilitation mechanisms for multinational companies to conduct IT R&D in Australia.

Recommendation 9

In order to strengthen ties between the tertiary sector and industry, and to encourage a closer interaction, the process of staff exchanges between industry and the tertiary sector should be actively encouraged by the following initiatives:
  1. Australian universities should allow academics from IT departments to spend time working in industry and such activities should be taken into consideration when criteria for promotion are being evaluated;
  2. the Federal Government should establish a scheme to facilitate industry personnel placement in an appropriately organised university department for a period of up to one year duration.

Recommendation 10

To improve the flow of information about the strengths in Australian IT research to industry, both Government and individual research groups must establish easily accessible mechanisms to allow industry to access information about the capabilities and achievements of Australian IT research groups in an ongoing way. This should include:
  1. a distributed World Wide Web-based registry of current research capabilities and activities;
  2. structured industry forums and workshops.

Recommendation 11

The Minister responsible for government IT programs should ensure that the Australian IT research community is represented on Government advisory committees for the information industries to provide an Australian research perspective to their deliberations. Such representatives should be nominated by that community.

Australian IT Research Education

Recommendation 12

Better academically qualified students must be attracted into the IT discipline at the tertiary level if more high calibre researchers are to be trained. This process must be started in primary and secondary education. To achieve this:
  1. DEETYA and the relevant State Government Departments in conjunction with universities must establish procedures and incentives which encourage more high achieving school leavers to enter IT courses at the tertiary level.
  2. State Governments should examine the quality of IT education at the primary and secondary level with a view to implementing world best practice in terms of the IT curriculum and teacher competence.

Recommendation 13

In order to reflect the increasing consolidation of the IT discipline, Australian universities should take steps to establish an appropriate organisational structure at departmental level which reflects the convergence of the components of the IT discipline.

Recommendation 14

To increase the cohesion of the IT discipline, the Australian Computer Society and the Institution of Engineers, Australia should develop a close working relationship at the national level, particularly in the areas of IT course accreditation, membership rights and promotion of the IT discipline.

Recommendation 15

The laboratory, equipment, software and technical infrastructure needs of IT have not been recognised because the discipline has been misclassified. Government and Higher Education institutions should reclassify the IT discipline to reflect funding levels that are at least equivalent to those applicable to the laboratory based physical sciences and electronic engineering.

National Focus on Information Technology

Recommendation 16

The development of strong local information industries to provide ongoing employment opportunities for the benefit of all Australians is vital. This can only be achieved through the development by the Federal Government of a broad, coherent strategy covering all industry, commerce, education and research sectors. In recognition of this, Federal Government portfolio responsibilities for the information industries covering telecommunications, information technology and the media should be brought under one minister.

Recommendation 17

Initiatives should be taken to raise awareness of emerging IT issues and directions in industry, commerce, government and the general public in an ongoing fashion. Professional and industry organizations including Australian Computer Society, Australian Information Industry Association, Australasian Interactive Multimedia Industry Association and the Institution of Engineers, Australia should regularly coordinate and conduct presentations on key IT issues including current research to the public and government bodies. In addition, centres such as the National Science and Technology Centre and the Powerhouse Museum should increase their coverage of IT-related subjects.

APPENDIX B: Summary of the report "The Cambridge Phenomenon"

Summarized from: "The Cambridge phenomenon : the growth of high technology industry in a university town"  (Segal 1985)

Segal Quince & Partners looked at four policy issues:

Historical perspective

Cambridgeshire, Cambridge's region, is located in the south east of the UK. Until around 1960 it was a prosperous agricultural region, with a small dispersed population and poor transport links to the rest of the UK. Around 1960 people began to move from the congested London region, with a 28% population increase by 1981.

 In the 1960s small factories moved to Cambridgeshire to escape London's congestion and for the low wages and unionisation of the region.

 During the 1970s new enterprises were formed, closest to London transport links and large towns. Improved transport followed development.

 Cambridge Scientific Instruments Company (now Cambridge Instruments) in 1881 and The Pye Group (1896) were significant in early working closely with University researchers to produce scientific instruments for the University and then industrial products for world markets.

 Planning controls in mid to late 1960s limited industry development and a University report in 1969 recommended a "science park" for science based industry, accessible to the University. In 1979 an informal "Cambridge Computer Group" promoted the interests of computing companies in the centre of Cambridge and drew the attention of locals and Barclays' Bank to stimulating hi-tech companies.

Computer Aided Design Centre

In the 1960s the UK Government funded a CADCenter at Cambridge, managed under contract by ICL.

 The government-university-company arrangement didn't work well, with conflicting objectives of R&D, technology transfer and aims of eventual self funding. In the 1970s key staff left and set up a successful company. The centre was privatised in 1983 and is successful commercially, being owned by IT, engineering companies, the University, Trinity and St John's Colleges.

Lessons of History

Statistical Picture

Segal Quince & Partners interviewed 261 firms around mid-1984 and estimated these were 85% of the relevant firms in Cambridge and employing 13,700 people. There was significant increase of firms in the 1960s followed by an explosion in the early-mid 1970s, with 60% of firms established after 1978. For the decade an average of 1.5 firms started up per month and a failure of only 7% of firms over five years.

 Most firms were independent, with only 25% subsidiaries of larger companies. The companies were small, with 30% having at most five employees and 75% having at most 30 people. The dominant industry was electronics, instrument engineering and computing, turning over 230,000 Pounds per employee. Segal Quince & Partners attribute the high productivity to deign being done in Cambridge and volume production elsewhere.

 Cambridge had 50% of firms and 80% clustered around near initial start-up companies and the science park. Segal Quince & Partners provide a complex "family tree" of companies. They suggest two kinds of company links:

There was significant movement of people between companies, the University and research laboratories, providing high quality technology transfer. Only 17% of new companies were by people straight from the University, more were from later spin-offs.

The major reason for locating the firm in Cambridge was that the principles already lived there. Local contacts, market opportunities and a prestigious address were also factors.

Cambridge was found to be a good place to recruit staff from and attract staff to. One third of staff were graduates in older firms and 60% in newer.

Two thirds of firms spent 5% or more of turnover on R&D, with one eight spending more than 50%.

Links with the Local Research Complex

Segal Quince & Partners argue that informal links between companies and the University/Research Organisations were important and have been understated by previous studies.

Very small (three person) precision engineering sub-contractors, spin-offs from University workshops, were essential to the high technology companies.

New market niches in high technology were continually opening and being filled by new firms, partly as subcontractors to larger local firms.

Many firms concentrated on exports to the USA and increasingly Asia.

Financial Aspects, Premises, Business Services & Communications

Segal Quince & Partners conclude that the availability of finance was not a limiting factor for high technology firms. Companies minimised the need for external finance until better established. The local office of Barclays' Bank was supportive with overdraft facilities, term loans and business advice. The bank also provided the secretariat for the Cambridge Computer Group. At the same time some venture capital became available for second and later round financing. A central government guarantee scheme on bank loans was also used by over 50% of firms started after mid 1981.

More complex government innovation schemes were less clearly of value, due to the short product development periods for high technology.

Availability of suitable premises was not a constraint. The science park was slow to develop for the first seven years. Later expansion was due to "nursery units". Differences to later technology parks were:

Improvements in roads provided better access from Cambridge and made for a less remote feeling. Air transport remains a problem. Car parking and congestion in the city centre were not a major problem.

Cambridge contrasts with high technology developments in Scotland, which attracted electronics plants of large established foreign companies. Indigenous companies are comparative less significant, as is the role of universities (apart from providing graduates for employment).

In comparison to Silicon Valley USA, Cambridge's high technology industry is several orders of magnitude smaller, expanded more recently, diversity and more quickly. Cambridge remains focused on research, design and development, Silicon Valley on high volume production.

Factors Shaping the Cambridge Phenomenon

Definition of the Phenomenon

Factors

Cambridge University provides a research organization with record of academic excellence, good supply of research students, public sector research funds and an ethos of self-confidence. 49% of teaching and research staff have no tenure and are on short fixed-term contracts. These people want to stay in Cambridge, but do not see long term careers with the University and so start new businesses. Around 2500 postgraduate students provide skilled part time staff for businesses.

Academic staff have relative freedom to have links to industry and retain intellectual property rights to work.

Local Research and Technological Institutes

Research bodies around Cambridge University became attractive to large organizations around the time of Segal Quince & Partners study (1985). They provided a source of staff, particularly with cutbacks on publicly funded research. Trends were for overseas firms setting up marketing/distribution activities [note: marketing to who?], limited production and R&D. They also monitored developments in Cambridge laboratories, while contributing to the laboratories.

 Public expenditure on research was a factor in development of computing and biotechnology firms, but there was lead time on a decade.

 The science park provided small cheap short term accommodation for already established firms. It also provided high cost, high quality property for prestige projects of international firms, with the prestige rubbing off on smaller tenants.

Cambridge Technology Association

The Cambridge Technology Association (previously Cambridge Computer Group) grew out of a meeting in July 1979 to encourage co-operation and support amongst new computer companies. The group provided moral support for new small companies, financial and business service firms were able to identify opportunities from the start-up computer companies and local authorities could see a new industry to encourage.

See also