From Silicon Valley to the South West, Chloe Rigby investigates the hidden depths of the region’s expertise in science and technology.
The extent of the South West’s world-class expertise in science and technology is a well-kept secret. You may know the region is home to the largest aerospace community in Europe, but did you also know it has the largest concentration of silicon designers outside the US? And the area is an international leader in the field of digital media.
The odds are that you didn’t – and you’re not alone. Professor Eric Thomas, vice chancellor of the University of Bristol and chairman of Science City Bristol, says: “Probably many people outside Bristol, and possibly even inside it, may not be aware of the depth of the science that goes on in the city.” That’s why the Science City Bristol conference being held in the city on 18 March will debate the thorny subject of branding.
Sarah Jane Chilcott, programme manager for Science City Bristol, adds: “Cambridge is seen as a centre for silicon designers – though there are fewer there than here. That perception spreads, and it is self-fulfilling in the end. The more we can do to raise the visibility of our science and technology community, the better the chances of people getting funding.”
The South West has 50 per cent more silicon designers than Cambridge, according to industry body Silicon South West. There are 5,000 people working in 50 companies in the region, of which the best known is perhaps HP Labs, which has a quarter of its global long-range research operations at its base in Bristol.
Panasonic and Toshiba are also in Bristol, and Motorola is in Swindon. Newer names include Ubiquisys, in Swindon, which has developed the femtocells that will be necessary for WiMAX wireless networks and has won investment from Google.
The story is similar in aerospace and defence where the presence of international aircraft manufacturers such as Airbus, Rolls-Royce in Bristol and Messier Dowty in Gloucestershire has resulted in a proliferation of suppliers to those industries across the region. In all, the industry employs more than 43,000 people in the region, according to the South West Regional Development Agency (South West RDA).
The region is also a hotbed for creative and digital media, employing 89,000 directly and 55,000 in related industries, figures from the South West RDA indicate. Perhaps the best-known names are the BBC and Aardman Animations, but the sector encompasses companies from TV production companies to recording studios.
So what is it that makes the region an international leader, and well-placed in the many other technologies, from pharmaceuticals to environmental technologies and IT security, that flourish?
It’s partly historical part, says John Manley, a director at HP Labs, as the area’s specialism developed around certain pioneers: for example, the Bristol Aeroplane Company, semiconductor company Inmos and the BBC’s natural history unit. Now Orange and HP Labs in Bristol and Vodafone in Newbury continue the tradition, attracting entrepreneurs to work close by. Having universities with an international reputation for science and technology research has also played a part, as well as the area being a draw to people who run technology companies and can work from wherever they like thanks to high-speed broadband.
“People from London and Cambridge are coming for quality of life,” says Dominic Titcomb, corporate finance director at Smith & Williamson in Bristol. “I’ve met guys who like surfing and come to the South West for that.”
It also means digital media companies are run from centres such as Falmouth and Truro, where young entrepreneurs have returned from college to set up businesses.
But, Titcomb adds, the main reason a lot of entrepreneurs come to the South West is access to funds and incubator schemes such as SETSquared in the University of Bristol. This sector is proving relatively resistant to economic turmoil. Twelve of SETSquared’s 37 occupants raised more than £23m in funding in 2008, and this January spin-out company Apitope announced it had scooped €154m by licensing its work on a therapy for multiple sclerosis.The success of university incubation units is being expanded through new science parks. Bristol and Bath are soon to get theirs, with work under way on the SPark at Emersons Green, but existing parks in the region include Tetricus Science Park at Porton Down in Wiltshire and the Tamar Science Park in Plymouth. Tetricus Park, with close links to the Defence Science and Technology Laboratories and Health Protection Agency, has a reputation for life sciences and three tenants have reported successes in the past year. Tamar Science Park is home to more than 50 knowledge businesses in science, technology and education.
While mergers and acquisitions are rare just now, there are deals for the right companies, says Titcomb. For example, Gloucester IT security business MessageLabs was acquired by Symantec for upwards of £400m in the autumn.
So what does the future hold for the sector? “I expect technology will be the first area to recover because the size of deals is smaller – less than £100m in terms of value,” says Titcomb. “It’s now cheap to buy companies, and sterling has dropped against some of the major currencies by 30 per cent in the past 12 months so overseas companies will be looking for opportunities.”
But he believes the area will need more access to venture capital – especially for start-ups. Although there is funding from NESTA (National Endowment for Science, Technology and the Arts) and South West Ventures, as well as high-net worth individuals looking to invest, Titcomb says funding is needed for hardware-based technologies that require a lot of capital.
Jason Hart, senior VP Europe of US and Bristol-based IT security business CRYPTOcard, agrees. He had difficulty raising the money to invest in CRYPTOcard, which merged with his WhiteHat business in a management buy-in in 2006. In the end he found a group of London-based private individuals to make the investment.
The Bristol-born businessman believes venture capital houses would find “a huge amount of opportunity” if they opened here. “The business and wealth that could be kept in the region will otherwise pass elsewhere,” he says.
At HP Labs, John Manley’s view is that the challenge for the greater Bristol area is in communicating its position as a “true science city”.
“It’s hard to know why the perception is otherwise,” he says. “Within different communities Bristol is seen as a major player – but there doesn’t seem to be one thing that says: this is where Bristol is a science city. We need to tell stories, such as that of IMDB (which runs the world’s biggest online movie database from Stoke Gifford), in an appealing way to catch people’s imagination.”
Manley reckons the region should consider working to establish itself as a European leader in one or two other areas. Green energy and sustainable technology is one option, he says. This is important, says Eric Thomas, because “people are catching on to the fact that the economic future of the UK lies in high-added-value industries. This will drive investment, policy-making and will mean we raise the city’s profile”.
Also in: March 2009
-
The big freeze
As the market becomes even more illiquid for the region’s smaller-cap companies, Christian Annesley counts the cost of a public listing.
-
Bay of hope
Plymouth is trying hard to reinvent itself, but will the recession hold things back? Christian Annesley reports on a city with big plans.