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

the demands of customers and clients,
and the challenge of competitors… I’d say
much of our technological development is
customer- and market-led. Sometimes, we
‘de-engineer’ our competitors’ products. But
we are also market leaders, and globally
orientated, so there is also an impulse to
improve so we stay on top. We do exchange
some knowledge and information with
similar local companies in Cambridge, but
this is mainly around applications and not
so much around our core technologies
– those which are key to the business’s
success – we don’t share those and the
knowledge they contain with others!”
[Interview CAMB002]
Cambridge Consultants, a key player in the
Cambridge high-tech cluster (see above) also
illustrates the importance of the knowledge
base. Its staff do up to 10 per cent of ‘offproject’
basic research, and are expected
to keep up with key developments in their
respective scientific fields. But the vast
majority of its business is in high-tech product
development for customers. Innovation
is market-orientated and demand-led:
manufacturers and clients engage Cambridge
Consultants to develop highly innovative
technology-based solutions and developments
for products that the manufacturers and
clients are hoping to commercialise. Cambridge
Consultants has a number of disciplinary
teams, including mathematicians, engineers,
physicists and material scientists, whose
scientific knowledge is brought to bear on
the product technology in question: the
approach is typically multidisciplinary. The
company specialises in radical not incremental
innovation, making its knowledge base highly
sought after:
“Cambridge Consultants is not particularly
interested in providing an incremental
innovation service for firms. Most
manufacturers and other firms are capable
of doing incremental innovation themselves,
in-house. We tend to specialise in fee-based
R&D for innovation of a more radical kind,
much of which requires a multidisciplinary
approach which firms can’t readily do
themselves. For this we employ the best
scientists we can. This makes us expensive,
but then that means that firms approach
and engage us expecting us to produce
radical solutions. After 40 years Cambridge
Consultants has built up an impressive
knowledge base and track record of
applying that knowledge to produce highly
innovative products.” [Interview CAMB003]
In Swansea, the picture is markedly different.
There is relatively little R&D and the city is not
seen by investors as a ‘natural home’ for R&D
activity. There are few R&D employees, no
critical mass as in Cambridge, and hence little
obvious reason why R&D activities should be
attracted to the city. The result is less use of
external sources of information and knowledge
for innovation. For example, although the Sony
plant at Bridgend now incorporates an R&D
facility, this only opened about 25 years after
Sony had first located in Wales; one respondent
suggests that Sony has few real roots in the
local economy.
However, a key principle behind the Technium
is the importance of harnessing external new
ideas within nascent businesses.
“If you’ve just got indigenous companies
growing and developing in silos […], then
my thinking was “you’re just going to get
more of the same”. You need to bring
in new ideas, you need to bring in fresh
thinking, and you can do that indigenously,
but it’s all a bit incestuous.” [Interview
SW001]
Within Technia, there are examples of inward
investor companies working with indigenous
companies, in some cases successfully
leading to flotation, but they appear to be
the exception rather than the norm. Around
10-15 per cent of Technia tenants are inward
investors, with the rest being indigenous
companies, whereas an ideal ratio would be
50:50. However, the difficulty of attracting
inward investors is recognised, as knowledgebased
businesses are attracted by local
expertise (academic or otherwise), rather
than any financial aid or grant assistance on
offer. After all, such companies can choose to
locate near any British or overseas world-class
university. And, the importance of bringing
in new ideas for the benefit of indigenous
companies has apparently not been fully
recognised by policymakers.
A further challenge for Swansea is its reliance
on Swansea University as the main source of
expertise, both to stimulate local innovative
firm formation and to attract new inward
investment firms to the city. But it is felt that
there is a lack of trust and experience in the
communication between industry and the
university.
“There are these two different worlds
of knowledge; the industrial world of
knowledge, and the academic world of
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