Aleksandra Pedraszewska still remembers the first time she saw the little green space station floating above the bench top, a vivid three-dimensional image seemingly projected in mid-air and at arm’s reach. “It was like something from science fiction,” she recalls. The experience had been made possible thanks to augmented reality technology developed by the photonics department of the University of Cambridge. The year was 2016, and although Pedraszewska wasn’t a scientist—she was a student at the University’s Judge Business School—a friend who knew the photonics team had invited her to the lab to witness their research in action. It would inspire her first steps into the world of entrepreneurship.
Enthused by what she had seen, Pedraszewska teamed up with four technical cofounders to create a company that would commercialise the AR technology on display. Fast forward seven years, and that company, VividQ, now has offices in Cambridge, London, Taipei, and Tokyo, has raised £17.5m in funding, holds multiple innovation awards and has established partnerships with several major technology companies. VividQ’s breakthroughs enable the generation of high-resolution images at unlimited focal depth, using off-the-shelf computing power, and it has applications for gaming and beyond. “It is finally delivering on the promise that augmented and virtual reality has been making for a very long time,” she says. What has driven this success? Pedraszewska attributes much of it to something often called the “Cambridge Phenomenon”.
The phrase was coined back in 1980 in a Financial Times article to describe the fast-developing technology cluster in the region, which had seen 41 companies formed over the decade prior. By the 1990s, Cambridge was producing companies at the rate of two per week, and the region’s reputation as “Silicon Fen” had been cemented by the success of semiconductor manufacturer ARM, which became a global powerhouse. As of 2023, a total of 23 firms founded in the city have hit billion-dollar “unicorn” status, and Cambridge is now Europe’s largest technology cluster, home to over 5,000 high-tech firms, employing more than 60,000 people and generating £21bn in annual turnover.
The ecosystem has had such an extraordinary track record that the Phenomenon label has stuck. But what are the factors that both gave rise to it and continue to fuel its success?
Most obviously, Cambridge is an ideas factory. It files 258.5 patent applications per 100,000 residents, outstripping any other UK city, and Cambridge University plays a pivotal role in that. In 1985, the economic development research consultancy SQW traced the origin of almost every high-tech firm in the region back to the university itself, and the institution remains an enterprise dynamo today. A 2021 report counted over 213 startups and 178 spin-outs associated with Cambridge University, with many more, like VividQ, based on key technologies developed in the ecosystem—making Cambridge the most influential UK university by this measure. Other research institutions that have since sprung up in the area, such as the Wellcome Sanger, are also having a similar effect, spawning industry-leading companies like Microbiotica, a global pacesetter in microbiome research and development.
Pedraszewska says that being part of this academic ecosystem is a key reason why VividQ’s lab and head office remain in Cambridge despite its global footprint. “We have access to the pool of talent that is being guaranteed by the University of Cambridge, we have all those ties with Judge Business School, with the mathematics and engineering departments,” she says. “It means we’ve never had any trouble finding the right people.” Regional founders often cite the city’s proximity to London and its “open-minded” reputation as factors that make it easy to recruit from outside Cambridge—and, indeed, from overseas.
But ideas and people mean little in themselves. “What really sets Cambridge apart is the cluster’s knack for commercialising academic work,” says Frances Howell, HSBC UK Managing Director and Head of Corporate Banking for Midlands and East Anglia. Cambridge University alone contributes almost £30bn to the UK economy—almost four times that of the Premier League—and is the world’s number one university for producing successful tech founders. “That hasn’t happened by accident, but by design,” she continues. “And it’s the result of a process stretching back more than half a century.”
It all began in 1960, when Cambridge Consultants was set up with the then revolutionary aim to “put the brains of Cambridge University at the disposal of the problems of British industry.” But perhaps the most significant development was the publication of the Mott Report of 1969, which urged greater technology transfer between academic research and enterprise. The report was instrumental in shifting local planning policy, while rules which originally prohibited commercial property near the University were gradually relaxed. Following the Mott Report’s recommendations, in 1970 a Trinity College initiative established Cambridge Science Park—home to many trailblazing businesses—and the St John’s Innovation Centre followed in 1987. Each was the first of its kind in Europe.
This tradition of proactively marrying academia with industry continued and, in 2006, the University established Cambridge Enterprise for the express purpose of helping to commercialise research. Ninety two percent of its portfolio businesses have a five-year survival rate—a high figure. Bit.bio, a synthetic biology company industrialising the manufacture of human cells, is one of them. “Cambridge Enterprise is absolutely crucial,” says Dr Mark Kotter, an academic neurosurgeon and bit.bio’s founder. Equally crucial, he says, is the freedom given to academics to pursue dual roles—professors can turn entrepreneurs, and inspire their students to do the same. “The University gives you a lot of autonomy. I think that is fantastic, and it’s not necessarily a given. That is something that we need to celebrate; there are a lot of spin-outs happening in Cambridge because of that flexibility and freedom.”
It has enabled Kotter to form not one but three companies based on his research. “Bit.bio is the most intriguing, in terms of the depth of science, and it’s the most exciting one when it comes to what it could do for patients and researchers. We found a process for rapidly manufacturing human cells that could be applied across all cell types, and which isn’t affected by scale. We spun out the company because we felt this technology needs to get out there. A publication is one thing, but that's not impact. Impact is when people can use it.”
Cambridge is arguably more liberal than many UK Universities when it comes to granting researchers ownership over their own ideas and research. This approach can help to foster entrepreneurship and accelerate IP transfer—though the jury is out on whether this approach always works as well as it should. Kotter feels there is still “some fine tuning required” in terms of reducing the amount of time it takes to get an idea out of the university—around 18 months at present. A standardised framework for IP transfer would accelerate this. “We must ensure that we learn from the best, and look at how Stanford, for example, pursues IP translation—then we’ll really be flying.”
It is clear that although the University may once have been the centre of the Cambridge Phenomenon, today the business community itself is just as important. This unique network of knowledge-intensive companies presents myriad opportunities for collaboration, and functions as a powerful flywheel for the cluster. The city’s small size underpins this ethos, and enables chance encounters that can spawn new ideas. It’s a running local joke that in Cambridge, “you are never more than eight feet from a software engineer” says Simon Thomas, CEO of Paragraf, a university spin-out creating graphene-based electronics at scale. In Thomas’ experience, “any problem you have, you can find someone to go and have a chat with, whether it's a query about pure tech from the scientific community, questions about business growth from your peers on the same trajectory, or advice from the really experienced people that have decided to stay in Cambridge.”
Thomas’ business is scaling rapidly thanks to the final crucial factor driving the Phenomenon today: a wealth of funding options, from local VCs to angel groups. “These are people who understand technology, understand spin-outs, understand business, and who are willing to invest,” he says. “If you've got an innovation, it's a great place to come and tout it around!” Paragraf recently acquired a company in San Diego, giving it an American base, and within the next six months Thomas aims to open what will be the world's first “two-dimensional material foundry,” creating graphene products composed of a single layer of carbon atoms.
Thomas says “the next few years are about growth”—for Paragraf, and for Cambridge too, perhaps: “I often say to people, it might be worth Cambridge thinking about expanding its borders if you want these businesses to grow here! There’s a great future. The only question is, ‘how big?’”
This article was originally published by WIRED UK
