Silicon Fen (sometimes known as the Cambridge Cluster) is the name given to the region around Cambridge, England, which is home to a large cluster of high-tech businesses focusing on software, electronics and biotechnology. Many of these businesses have connections with the University of Cambridge, and the area is now one of the most important technology centres in Europe.
It is called "Silicon Fen" by analogy with Silicon Valley in California, because it lies at the southern tip of the English Fenland. The interest in technology in the area started with Acorn Computers.
More than 1000 high-technology companies established offices in the area, during the five years preceding 1998. Some early successful businesses were Advanced RISC Machines and Cambridge Display Technology. In 2004, 24% of all UK venture capital (8% of all the EU's) was received by Silicon Fen companies, according to the Cambridge Cluster Report 2004 produced by Library House and Grant Thornton.
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 University 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 or 01223 telephone area code, or more generously in an area bounded by Ely, Newmarket, Saffron Walden, Royston and Huntingdon.
In 2000, then Chancellor of the Exchequer Gordon Brown set up a research partnership between MIT and Cambridge University, the Cambridge–MIT Institute, in order to increase international collaboration between the two universities and to strengthen the economic success of Silicon Fen.
In February 2006, the Judge Business School, Cambridge University reported estimates that suggested that at that time, there were around 250 active start-ups 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, Autonomy Corporation and AVEVA are the most obvious examples, and more recently CSR has seen rapid growth due to the uptake of Bluetooth.
It was found in 2012 that strong employment growth was hampered due to the concentration on research and development. This was because of limited competition in manufacturing capability and its consequent cost.
Recent work by Cambridge Ahead, the business and academic membership organisation, has shown remarkable growth during 2014/15, with Cambridge companies enjoying a 7.7% increase in turnover (£33 billion) – and a 7.5% increase in employment. What is striking about the data is that 2014/15 was just another typical year judged on Cambridge’s recent performance. Over four years (2010/11 to 2014/15) the turnover of Cambridge companies has grown by 31%, employment by 26% and the number of companies by 25%.
The growth of Silicon Fen is best revealed by the Cambridge Cluster Map, a new data tool that accurately maps the growth of the Cambridge sub-region over time and reveals the true extent of the success of the ‘Cambridge Phenomenon’. The map was created and launched by Cambridge Ahead in partnership with Barclays, working with the Centre for Business Research (CBR) at the University of Cambridge, and is an updated version of the previous Cluster Map covering the Tech sector launched in 2012.
The new dataset identifies and locates companies and certain research facilities that are active within a 20-mile radius of the centre of the city and shows three types of organisations: Cambridge-based companies, Cambridge-active companies, and Non-corporate Knowledge-intensive (KI) organisations.
The region has one of the most flexible job markets in the technology sector, and people are often employed by other companies after a start-up fails. Although everyone wants their company to succeed, failures are tolerated, indeed almost expected.
One reason for the area's success is that after some time 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 factor is the high degree of 'networking', enabling people across the region to find partners, jobs, funding, and know-how. Organisations have sprung up to facilitate this process, for example the Cambridge Network.
Another factor is the academic pre-eminence of Cambridge University, which is one of the top 5 universities in the world, a high standard of living available in the county, and good transport links, for example to London and with Cambridge Airport now handling scheduled and charter airline flights from Europe as well as a full service business jet centre. Many graduates from the university choose to stay on in the area, giving local companies a rich pool of talent to draw upon. The high-technology industry has little by way of competition, unlike say in Oxfordshire where many other competing industries exist. Because Cambridgeshire was not until recently a high-technology centre, commercial 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.