Cambridge as a platform city

My notes on Philip Cooke (2018) Generative growth with ‘thin’ globalization: Cambridge’s crossover model of innovation, European Planning Studies, 26:9, 1815-1834, DOI: 10.1080/09654313.2017.1421908

Since moving to Cambridge in July 2017, I’ve become fascinated by the transformation underway within the city and what it reveals about the political economy of the UK. This paper by Philip Cooke argues that Cambridge is in a state of growth comparable to Silicon Valley (on a larger scale) and Israel (on a small-country scale). In 2017 there 4330 technology firms in the city, employing 59,102 people and generating £11.1 billion revenues in the previous year. This includes five firms worth more than £1 billion in an area which has the highest concentration of Nobel prizewinners in the world (pg 1816). The benefits of regional clusters have tended to be couched in terms of knowledge-based interactions taking place on a local level and lowered transaction costs between firms. However Cooke is concerned by the process through which clusters diversify and come to constitute a cluster-platform. From pg 1817:

This takes a specific meaning of ‘platform’ metaphorically comprising ‘boards’ or ‘planks’ that give strength to different but related elements which may be mounted upon it. This is different from the more specialized idea of a ‘technology platform’ such as a smartphone Appstore. Here, the variety of applications is specialized at the App-level but diversified at the device level.

The “crossover potentiality” which characterises a cluster-platform has radical economic consequences. It is built on three features: (1) world class university research providing “cognitive raw materials … at the leading edge of problem definition” and dedicated research centres which can solve problems early (2) global corporations with specific needs able to enter into long-term relationships with ‘knowledge suppliers’, providing the grounds for SMEs to flourish (3) internationalisation which facilitates the rapid diffusion of innovation outside of the country of origin. These factors have allowed the existing high-tech cluster of Cambridge to evolve into a “diversified cluster-platform”.

One of the striking features of it is the preponderance of “many micro-sized firms in all sectors” (pg 1818). Cooke argues that a much higher potential for innovation comes with this structure, citing examples such as “algorithms designed for turbulence in rivers transmuted into AI for currency trading, which, in turn, mutated into cybersecurity forensics” (pg 1819). What makes these ‘cognitive crossovers’ possible? They can’t be controlled by a single corporate actor but capital accumulation at this advanced stage depends upon them. There are five main forms which relationships between Cambridge firms and external firms take: partnership, commissions, ownership, acquisition and alliances (pg 1828).

They also depend upon a macro-social context which is heading in the other direction. Unfortunately, the reliance on highly skilled labour, particularly from outside the EU where majors in emergent disciplines and design engineering approaches are more common, places “the cluster-platform in head-to-head disagreement with the U.K.’s populist anti-immigration regime associated with the Brexit debâcle”. Risk finance is in shorter supply, though this was helped by quantitative easing and low interest rates (pg 1821). Furthermore, continued research funding is necessary, particularly “‘flexible research funding’ that furthers and fosters :‘knowledge at interfaces’ (‘crossover’) types of interdisciplinary research profile to evolve along multiple inter-dependent research pathways” (pg 1822). This is one reason why a university like Cambridge has begun to sell its own bonds, described on pg 1822:

In the U.K., the Bank of England currently buys bonds issued by some universities, including Cambridge. The largest university bond was a £350 million issue from Cambridge in 2012 with a maturity date of 2052. Such bonds are sold to finance university research and teaching – deemed officially to make a material contribution to the U.K. economy.

Furthermore, private funds like Cambridge Innovation Capital and institutional actors like University of Cambridge Enterprise have placed the UK at the top of league table for university venture funds. The latter has administered deals “involving 11 companies that were sold or stock exchange listed with a combined value of £1.3 billion”, owning their own IP and incubated with support within the university. Much of the capital for initial investments has come from the Gulf and Asia (pg 1822). The University of Cambridge Enterprise offers seed capital, consultancy and IP advice to university spin offs (pg 1823). These operate alongside what Cooke describes as “‘associational’ agencies that support cluster-platform growth” (pg 1827). He cites the example of the CleanTech boom in Cambridge, with “one hundred cleantech firms of which 25% had in 2016 been ranked in the U.K.’s top 50 cleantech firms” (pg 1826), illustrating how incubation activities support nascent areas of specialisation which feed into the broader platform-cluster. I’m particularly interested in the micro-sociology of the events such agencies run, such as the example given on pg 1831:

To support the sharing of specialist knowledge and further development of the sector, the Regional High Value Design Group held an October 2016 networking seminar event at Cambridge’s Granta Science Park about the crossover between aerospace, automotive engineering and healthcare. Forward Composites (materials science) reported on operations in the aerospace, defence, automotive and motor sport sectors. Crossover presentations from advanced combustion engine designer Cosworth Group of Cambridge, now a leader in the transfer of motorsport electronics technologies into adjacent markets were made. Other presentations linked AEC SELEX, part of the Italian company Finmeccanica Leonardo, one of the world’s largest defence and homeland security technology companies and the largest Italian investor in the U.K., to identify areas where SELEX’s expertise can be used to keep people alive in a different setting, in the healthcare sector.

Platform clusters fuel “a host of innovative applications that sound like hype but are actually being innovated in cascades of technical change that seem highly likely to have prodigious social and economic impact” (pg 1829/1830) with past populist backlashes suggesting the “the implications for famine, unemployment, migration and war could be truly apocalyptic” (pg 1830). It is tied up in the emergence of a ‘thin globalization’ which sees vast areas shaped from a few “command posts” (pg 1816). This has to be understood against a background of rising global turmoil, described on pg 1831-1832:

Today, geopolitically, the world is in turbulence, with threatening climate change, wars in the Middle East, mass migration from war zones into Europe and the U.S. caused partly by starvation and economic inequality as well as desertification and poor water resources related to climate change. There are many more problems connected to ageing populations and disease that put pressure on health and social care.

Cooke suggests that platform-clusters herald the end of big corporate r&d conducted in a linear way, instead giving rise to decentralised approaches suitable to complex problems.

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