History Matters: Path dependence and innovation in British city ...

Figure 24: Cambridge and Swansea employees in R&D and higher education combined
1981-2006
30,000
25,000
Number
of
employees
20,000
15,000
10,000
5,000
0
1981
1984
1987
1989
1991 (CE)
1991 (AES)
1993
1995
1996
1997
1998 (AES)
1999
2000
2001
2002
2003
2004
2005
2006
Years
Cambridge
Swansea
Knowledge identification
According to ‘absorptive capacity’ theory,
the sectoral and occupational structure in a
city economy shapes the ability of its firms to
identify new knowledge. Data from CIS4 (see
Figure 23) suggest that Cambridge firms utilise
external information much more extensively
than their counterparts in Swansea, and indeed
more than the national average; this implies
that Swansea firms rely more on internal than
external information as a factor in innovation.
Furthermore, Swansea firms seem to make less
than average use of most information sources
aside from universities, government and public
research bodies.
This difference is compounded by major
variations in the absolute numbers employed
in key knowledge-based activities, such as
R&D and higher education (see Figure 24).
Cambridge has tripled the number of such
workers since the early 1980s, in line with
the growth of the high-tech economy; their
number is currently estimated by CIS4 at
around 25,000. As the cluster has grown, so
has the pool of knowledge workers, which then
reinforces the innovative performance of the
economy. The city has thus developed a vital
critical mass of such workers:
“There is no doubt that it is the size of the
technical, scientific and highly educated
workforce that is a key ingredient of
Cambridge’s success. Some of these workers
have been drawn from the university, but
many also come from elsewhere in the UK,
even globally, to work in Cambridge. The
cluster is able to attract the knowledgeintensive
workers it needs, and there is
a significant movement of these workers
between firms within Cambridge. In this
sense there is a constant circulation of
knowledge within the cluster. And such
people, by their very nature, are also
used to searching for and acquiring
relevant information and knowledge from
elsewhere.” [Interview CAMB001]
Interviews with Cambridge firms suggest
that they use multiple sources of relevant
information and knowledge for innovation. As
one firm puts it:
“We generate the knowledge needed
for innovation in several different but
interacting ways. We have our own
dedicated research groups of highly
qualified scientists and engineers. We
appoint people who are thinkers, who can
see where technological improvements can
be made, and are problem solvers. They are
concerned with developing and extending
our technologies. They are allowed a
certain amount of time – say around 10 per
cent – to ‘think outside the box’. Mainly,
however, they are working on technological
developments, improvements and advances
in response to new market opportunities,
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