Hold on tight, the brain train is off to Cambridge

Climb aboard what we locals call the ‘brain train’ from London Liverpool Street to Cambridge and you will be in for a big surprise. Not only are we finally in the 21st century with super fast trains on the line but if you stay on the train after the city centre, there’s a spanking new station, Cambridge North, taking you right into the heart of Silicon Fens science and business parks.

The new station, which cost £50m and opened two months ago, is stunning to look at and is the best of British design. And, typically, the striking patterns on the aluminium cladding of the building are already causing grief between Cambridge mathematicians and arch-rivals at Oxford. The architects say that the unusual pattern is derived from John Horton Conway’s ‘Game of Life’, a ‘cellular automation’ zero-player game, which he devised while lecturing at Cambridge. Yet maths geeks claim the design is not the Game of Life at all, but bears a closer resemblance to Oxford educated mathematician, Stephan Wolfram’s Rule 135. Hey ho. No doubt they will spend another 800 years arguing between themselves.

Built by Network Rail and designed by Atkins, the British engineering to project management consultancy, the station has all mod cons – green technology including solar panels on the roof, unmanned ticket offices and even rooms for rail staff on site. The car park is huge and the cycle park – this being Cambridge – takes a 1,000 bikes.

But most importantly of all, Cambridge North dramatically cuts the journey time for Britain’s brightest boffins and the money-men to get to the science parks. It now takes six minutes by train rather than the 30 minutes on the choked up roads. As well as connecting London to Cambridge faster than ever – there are rival ‘brain trains’ running to Kings’ Cross – there are new services to Norwich, speeding up the passage for academics and workers moving to and fro to East Anglia’s growing agribusiness research parks.

There is even chatter that a third terminus is being planned to the south on the new Cambridge Biomedical campus at Addenbrooke’s Hospital, which is fast becoming Europe’s biggest medical and science metropolis now that AstraZeneca has opened its global HQ on the site which will, when complete, employ 2000 specialists.

No wonder Cambridge academics, business angels and hi-tech entrepreneurs are whooping with delight. They have been crying out and lobbying for a new ‘Victorian age’ of infrastructure for decades, worried that the city’s extraordinary metamorphosis into one of the world’s most dynamic cluster of innovation was putting strains on the town but also holding back growth.

So the new station – as well as masses of new housing and university accommodation in the north – has come just in time. According to a new report out this week, Cambridge is now officially the UK’s fastest growing city economy – overtaking Milton Keynes. The UK Powerhouse report, by the Centre for Economics and Business Research together with lawyers Irwin Mitchell, gives a quarterly estimate of GVA – the value of goods and services produced- and job creation within 45 cities about a year ahead of government figures.

On just about every measure Cambridge came out top with its skilled workforce employed in highly-productive and advanced engineering, design, and pharmaceuticals companies contributing to a 2.9% year-on-year expansion in output in the year to the first quarter of 2017.

There are more patents published in the city than anywhere else in the country, 80% of all start-ups survive past the three year and the average worker earns far more than in the rest of the country. If it keeps going at these levels, the Cebr study reckons that Cambridge will have the fastest growing economy in the UK over the next decade as well.

Just to put icing on the cake, the city’s productivity levels are super human: the output per worker is worth £70,200 in 2017, compared to a UK average of £59,00. This is the vital bit of Cambridge’s secret to success, and the bit that the rest of the UK needs to crack if it’s to lift productivity levels.

Productivity is now 0.4% below the pre-downturn peak in the last quarter of 2007: a lost decade in terms of real wages. The latest ONS figures show that output per hour worked in the UK is some 16% below the average in the other G7 countries.

The reasons why productivity is so much lower here than on the continent is no mystery. It’s partly a function of business investment. Corporates have been hoarding cash for the last decade as well as paying more out in dividends and share buybacks rather than invest directly in R&D or new expansion. Indeed, the proportion of earnings which UK companies paid out in dividends and share buybacks increased from 39 per cent to 46 per cent from 1990 to 2014.

Although there has been a rise in business investment post-crash, much of its has gone into increasing headcount rather than in technological capital to increase the output of workers.Less spending in the UK on further education, skills and training- by both government and business – is another big factor.

Which is why Cambridge is so interesting and why other regions – and indeed policy-makers – need to find the magic about what makes the region so special.

That magic ranges from the simple to the complex, from the tangible to the intangible and the unique. You have to start with the history of the place and the brains of those working there, both of which act as a magnets to other great minds.

Yet what triggered the Cambridge phenomenon was largely a deliberated and bold decision by the university in the 1970s to allow academics to commercialise their ideas. The university – one of the richest institutions in the land -also set up its own incubator fund to help them spin out their inventions.

This in turn prompted local business men and women – or the angels and investors – to become curious about what was going on, leading to an extensive network of rich locals investing in small start-ups, like those in the Great Eastern angel network.

Thus a subtle ecosystem was created, one in which successful entrepreneurs and angels reinvested their proceeds ad infinitum; entrepreneurs like Herman Hauser, Andy Richards and David Cleevely are still doing so. As one professor once told me: “Everyone you need to know is only two phone calls away.” He meant both those with brains and money, and usually contactable by bike or in the bars.

Of course it would be foolish to try and replicate Cambridge’s particular DNA but there are lessons to learn from its evolution. Perhaps the most important one being that the city’s healthy start-up culture has the tightest links to accelerator and incubator funds, whether they be in the City of London or in the original Silicon Valley, big investors in the Cambridge scene. Cambridge station is the only one I know that sells hard copies of Fast Company, the US hi-tech magazine. And it won’t surprise you to learn that the city’s elders are now considering plans to build tunnels under the city centre.