Clusters at the mercy of planners

August 6, 1999

Silicon Valley (and other US high-tech clusters) developed over more than 30 years through a serendipitous combination of good universities, supportive state governments and big federal contracts, driven innovators and, in California, fine weather. Now from Cambridgeshire to Malaysia, copycat attempts are legion.

This week's Department of Trade and Industry report on the "clustering" of high technology says much about why it is difficult and quite a bit about issues such as taxes and intellectual property, but does little to pin the blame where it belongs on the obstructionism of, especially, the Treasury.

The villians of the piece are local planners, who are told to seek "innovative ways" of resolving conflicts between economic and environmental priorities. These are certainly needed. High-tech firms should develop near the academic departments that inspire them, and many of these are in places where ancient landscapes and townscapes need protecting. But that does not mean pickling such towns in aspic.

The Wellcome Trust's bid to build a campus at Hinxton near Cambridge is the first real test of whether the environment department will insist on including economic considerations in planning decisions. Genome research raises many issues, but if Hinxton does not get the go-ahead, Britain must expect to see the economic benefits of some of its most far-reaching science accruing to others. East Anglia was at the economic forefront 500 years ago in the high days of the medieval wool trade. It could and should be again.

The clustering report also pushes the idea that regional development agencies should nurture innovation zones, for example, along major road routes near research universities. But unless developments are closely linked to academic centres of excellence, they invite a repetition of the real-estate scams that accompanied the establishment of science parks in the 1980s, few of which paid dividends to their academic neighbours. RDAs will all want to support high technology, but not all will have East Anglia's biotechnology, the Cotswolds' group of companies supplying world motor racing or Liverpool's computer games designers. Worse, the report's authors were apparently unaware of dwindling support for regional initiatives within the prime minister's office.

Universities have much to gain from being at the centre of a successful technology cluster. But this week's report points out that even big US universities make only a few per cent of their income directly from these activities. British institutions should not overestimate the financial benefits, which may be small and will certainly be long-delayed.

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