Cambridge’s emergence as a global innovation powerhouse was not the result of a single policy or institution, but decades of interaction between government intervention, infrastructure, institutions and local networks. Julia Wdowin traces some of the historical developments behind the ‘Cambridge phenomenon’, and what it can teach policymakers about enabling sustainable, place-based growth across the UK.
National government interest in Cambridge has intensified significantly over recent years, with successive governments making numerous announcements affirming their support for growth in the area, alongside investments to deliver it. Cambridge’s high-tech innovation cluster, for example, featured as a strategic growth region in the UK’s Industrial Strategy 2025, and earlier this year, the current government announced it would allocate up to £800 million in funding for developing the Oxford-Cambridge corridor, including expanding affordable homes, infrastructure and business activity across Greater Cambridge.
Since the 1960s, the Cambridge innovation ecosystem has grown almost exponentially. By the mid-1980s, Cambridge was home to around 300 high-tech firms, whereas by 2010 around 5,000 high tech firms were recorded to have been created since 1960 (OECD, 2021). The remarkable growth that transformed Cambridge into a global innovation leader has been captured by the term ‘Cambridge phenomenon’, coined in the 1980s and studied ever since as a model from which to draw lessons.
Examining the underlying conditions that have enabled the Cambridge phenomenon remains an important task for researchers and policymakers alike. Whilst policymakers remain focused on the immediate economic and welfare benefits of investing in Cambridge, an equally important objective is to understand the broader, national mechanisms that have underpinned its development to date. Analysing these dynamics uncovers critical barriers to Cambridge’s ongoing growth while offering valuable lessons for economic development across the rest of the UK.
This “Cambridge cluster” project looks to address this gap by considering how central government policy across public, private, and civil spheres has both helped and hindered the growth of the ‘Cambridge phenomenon’ over time, deepening our understanding of the multi-scalar institutional and infrastructural foundations underlying its long-term expansion.
The foundations for the innovation ecosystem development have been repeatedly attributed to a range of formal and informal institutions (Caselli et al, 2021; Keeble et al, 1999). Formal institutions include rules or organisations structured through recognised authority, whilst informal institutions are shaped by unwritten rules, norms and social practices. Regarding the role of formal institutions, much is commented on the role of the University of Cambridge as an initial driving force (for example Guilliams, 2013). It has, according to much of the literature, played a key role through the creation of frontier knowledge through the research process, the generation of corporate spin-offs, as well as the supply of a stream of relevant highly-skilled human capital.
Similarly emphasised is the instrumental role of place-based institutions, such as Cambridge Science Park, or Cambridge Enterprise, a bridging organisation connecting academia and industry. Long-standing local institutions such as these are part of the local infrastructure and ecosystem, supporting development in Cambridge.
Parallel to these formal structures, informal institutions have played an equally decisive role in driving expansion. These shape how people in a given society behave and can help explain the particular local entrepreneurial culture and dominant mindset observed in Cambridge (Caselli et al, 2021). It is not only physical connectedness that is a feature of Cambridge, but a connectedness in purpose and mission that has been observed as a key growth engine (Barrell, 2022).
Importantly these informal cultural dynamics rely on a supporting network of physical and social spaces. Indeed, the value of Cambridge’s formal and informal institutions is significantly amplified by the complementary infrastructure surrounding them. On the one hand, there are specific scientific institutions and infrastructure in place to support innovation in Cambridge, from a network of science parks necklacing the city to the social infrastructure of innovation – those places that over time have enabled collaborations and working relationships based on trust to be built, and that allow for the open knowledge share and transfer that is characteristic of Cambridge to occur (Runiewicz-Wardyn, 2022). It is geographical proximity created through the infrastructure that is key to boosting the connectedness and entrepreneurial mindset specific to Cambridge.
However, across Cambridge there are concerns about the capacity of all types of infrastructure to keep up with the pace of growth across the area. Wider infrastructure, such as transport, water, housing and health, are necessary: without them there are important implications for the stream of human capital needed to support the continued expansion of innovation.
Cambridge’s experience arguably demonstrates that place-based development depends on the complementary co-evolution of institutions and the infrastructures that support them. As yet, however, the role of interactions across public, private, and civil spheres remains underexamined in understanding the development of the Cambridge ecosystem. Understanding the contributions of multiple stakeholders across different administrative and geographical scales is important for unlocking the future pathway to ‘good growth’ in Cambridge and elsewhere.
The role of central government in the development of the Cambridge ecosystem is rarely explored in depth. Where this question has been addressed, empirical evidence of central government intervention has been provided. For example, in Forth and Jones’ (2020) paper on regional R&D investment has shown the relatively high levels of both public and private sector investment in Cambridge and the surrounding East Anglia region.
Taking a historical perspective offers a particularly insightful approach to understanding Cambridge today because it enables the evolution of institution–infrastructure interactions to be traced over time, preventing a snap-shot account which may view development as the outcome of isolated policy decisions or one-off infrastructure interventions. Whilst singular policies may have been strongly influential, such an approach allows the broader joint and cumulative effect of interventions to be examined. This historical perspective is particularly valuable in identifying how early policy decisions and investments shaped later economic developments, where given interventions created opportunities that were reinforced through subsequent public and private investment.
Examining policy before the period of rapid expansion is expected to be especially revealing. The 1950 Holford–Wright Plan, demonstrates the infrastructure and spatial planning priorities that existed before the beginnings of Cambridge’s major growth phase. While the Plan was above all an exercise in town planning, intended to preserve the city’s historic character while accommodating population growth, it also clearly influenced economic development strategy – albeit unintentionally. Later developments, such as the Cambridge Science Park, emerged within the Plan’s spatial context.
Another example relates to the purchase of physical spaces around Greater Cambridge for research and innovation purposes. During the 1940s and 1950s three country houses within easy reach of Cambridge were acquired by the Agricultural Research Centre, Pest Control Ltd, and Tube Investments Research Laboratories. These sites provided the space required for expanding scientific research whilst maintaining access and proximity to the University and its research networks. They are now home to the Babraham Institute, Chesterford Research Park, and the Wellcome Genome Campus, respectively. While post-war changes to Estate Duty may be linked to increased opportunities for private sector and government investment in establishing research facilities close to the city, these developments provide insight into how investment in innovation spaces preceded the wider emergence of the Cambridge ecosystem. Similarly, the aforementioned Cambridge Science Park, the first science park in the UK established in 1970 by Trinity College, was built on a brownfield site that had previously been used by the US Army in advance of the D-Day landings in 1944.
Overall, the trend in establishing such facilities offers an example of investment in innovation spaces preceding the full-on emergence of the Cambridge ecosystem, instituting foundations for later expansion. Taken together, these examples suggest that Cambridge’s development was a cumulative process in which institutional reforms and infrastructure planning and investment interacted over several decades to generate the conditions that enabled the Cambridge phenomenon to emerge.
Adopting a historical and institutional perspective addresses vital questions for the future governance of Cambridge and regional economic policy across the UK. It prompts us to consider how established institutional strengths can be sustained and adapted to foster ‘good growth’ that directly addresses local challenges such as housing affordability, transport constraints, and inequality. Furthermore, it challenges us to measure the value generated from the interactions between institutions and infrastructure, recognising that it is often their complementarity rather than their individual strength that shapes long-term economic outcomes. Making progress in these areas through a broader evaluation of the Cambridge phenomenon has the potential to yield key insights on the foundational role of institutions and infrastructure for shaping future industrial strategies.
Image: Cambridge Science Park
The views and opinions expressed in this post are those of the author(s) and not necessarily those of the Bennett School of Public Policy.
