What is the new economy in
Oxfordshire?
Helen Lawton Smith
Department of Management
Birkbeck, University of London
& Oxfordshire Economic Observatory, Oxford
University
Presentation at Department of Planning
Seminar Series, Oxford Brookes
University, March 6 2014
Overview
•What are the features of Oxfordshire’s ‘new
economy’?
• How is it similar and different to the ‘old
economy’?
• What are its exceptional features?
• How is it changing?
• As an entrepreneurial region, how is it
being sustained?
Main sources of evidence used today
• DPhil thesis School of Geography Oxford University 1990
• – The Location and development of advanced technology industry in Oxfordshire in the context of
the research environment
• Current study- where are they now?
• OEO reports since 2001 – oeo.geog.ox.ac.uk including
Enterprising Oxford (2003, 2007)
– OEO team: Lawton Smith, Glasson, Chadwick, Romeo, Waters
• OEO contribution to SQW Oxford Innovation Engine
Report (2013)
• Lawton Smith, Glasson et al (2013) ‘Enterprising
Regions:evidence from Oxfordshire and Cambridgeshire’
Assessing the innovativeness of a region
• what is specifically regional in the innovative
process in the region under consideration?
– Direct and indirect evidence
• what are the alternative possible explanations for
regional economic performance in the regions
under consideration?
• what is the conceptual model of this relationship?
(Storper 2000)
Storper and an evolutionary economic
geography approach
• ‘it is not enough to simply summarize the evidence on regional hightechnology growth in the 1990s, with standard indicators such as
number and size of firms, employment, some remarks on products,
etc. But that is not generally what is meant in the literature by
evolutionary. This term comes specifically from evolutionary
economics, and is inherently tied up with notions such as
interdependence among actors, the way that such interdependencies
and spillover effects create histories and render certain kinds of
developments possible and impossible, and so on, all of which are
generally summarized in the notion of path dependencies. To analyze
such path dependencies (or evolutionary trajectories), then, there has
to be careful attention to the factors that bind actions together and
generate specific pathways in time and space. Its much more than just
describing, however competently, the fact of how a given regional
high tech economy grew in the 1990s.’
(Storper 2000)
Examples of other conceptual models relating to
innovative entrepreneurship and regional growth
•
•
•
•
Innovative milieux (Camagni 1991)
Regional innovation systems (Cooke 1992)
Clusters (e.g. Porter 1995)
Knowledge spillover theory of entrepreneurship (Audretsch
and Keilback 1995)
• Feldman and Francis (2006) three stage growth model
• Regional triple helix spaces (Etzkowitz 2008)
• Fritsch and Schindele 2011 – labour markets and
entrepreneurial activity
Governance: entrepreneurial regions
• ‘entrepreneurial regions are defined by growing
high levels of entrepreneurship and innovation,
and as regions with outstanding entrepreneurial
visions’ (EU, 2013).
• must also be places where there is co-ordinated
entrepreneurial activity to put those visions into
practice so that ecosystems function effectively.
• agency of research institutions, local government,
skills agencies and so on working together.
An economic transformation: from a rural town with
a famous university, a car industry to a high tech
economy
• Oxfordshire was in the top 19 counties of high technology industry in 1981
(Hall 1985) and R&D did not feature in the list of key sectors in the City of
Oxford in that year.
– Highest employment categories in Oxford City motor vehicle manufacture and
education – both 16% (8.5% and 12.3% respectively in the county)
• Mid-1980s, 182 R&D-intensive advanced technology firms employing 10,659
people
• 35 university spin-offs
• late 1990s - developing as a national and internationally important high-tech
economy based in the South East of England, part of the Thames Valley, itself
the richest and most dynamic economy in the UK outside London (Economic
Development Strategy for Oxfordshire 1998/9, 4).
• 2014 growing high-tech economy but on some indicators is underperforming
comparator regions – Cambridgeshire and Thames Valley
Oxfordshire’s new economy:
exceptional features
• Rapidly growing number of high-tech firms,
clustered in a few sectors (manufacturing and
service)
• strong science base
• highly skilled labour market
• anchor high-tech firms
• business survival rates better than England levels
and any other county council area.
• Networks e.g. Oxford Trust (Science Oxford),
OBN, Venturefest
Advanced Technology Industry in Oxfordshire: Employment Change by Activity March 1987
Activity Heading (1980 SIC)
1979 1987
No.
No.
Est's Est's
1979
Emps
1987 % Change
Emps
Chemicals/Pharm/Biotech
Engineering
Computers, office machinery,
electronic data processing eqpt
Electrical equipment
Telegraph & telephone eqpt
Electrical Inst. & Control
Radio & electronic capital goods
Components & other electronic eqpt
Racing car manufacture
Vehicle components
Scientific & Precision Instr.
Other Manufacturing
2
5
8
9
95
490
87
385
-27.5
-23.8
3
5
1
4
9
10
1
53
10
5
4
1
9
6
39
651
20
576
187
4
109
1000
260
2111
460
988
72
1885
562
46
362
530
295
2270
+1079.0
+51.7
+260.0
+226.6
+200.0
+600.0
+232.1
-47.0
+13.5
+7.5
Computer software
4
25
302
577
+91.1
R & D/Consultancy
13
32
1886
2140
+13.7
50
182
7731
10659
+37.9
Total
6
2
4
1
_____________________________________________________________________
Number of employees
Total
employees
sectors)
(all
As % of total employees
320,600
100
Eurostat high-tech sectors
 manufacturing
 services
 total
4,000
16,000
20,000
1.2
5.0
6.2
Wider high-tech sectors
 manufacturing
 services
 total
13,100
29,900
43,000
4.1
9.3
13.4
SOURCE OEO/SQW 2013
Oxfordshire’s largest high tech sectors (wider
definition) by employment 2013
• computer, electronic and optical products
(3,500 employees),
• motor vehicle manufacture (3,500),
• publishing activities (5,500),
• computer related activities (8,200),
engineering & technical consultancy (7,100)
scientific research and development (5,700).
• Biomedical sector??
Anchor high-tech firms
• Some earliest firms and largest firms
originated in Oxford University or had a
university connection
• Penlon 1943
• Littlemore Scientific Engineering Ltd 1953
• Oxford Instruments 1959
• Research Machines (RM), 1973
• Sophos 1981
Oxfordshire labour market
• One of most highly qualified labour markets in the
county
– Three-fifths of Oxford residents in employment are in
managerial or professional occupations, compared to around
two-fifths in Great Britain
• 2011, 21,000 students at Oxford University, 11,752 UGs
and 9, 621 PGs
– Rising student numbers e.g. Oxford University had only 5,312
PG students in 2000/1 hence a rise of over 5000 in 10 years
• About a third Oxford University (32.62%) and Oxford
Brookes University (34.6%) students stay in the county
after their first degree.
GVA per hour in Oxfordshire,
Source ONS, 2013
Managers, directors and
senior officials
A significant amount of knowledge and experience of the production processes and service requirements associated with the efficient functioning of organisations and businesses.
Professional occupations
A degree or equivalent qualification, with some occupations requiring postgraduate qualifications and/or a formal period of experience-related training.
Associate professional and
technical occupations
An associated high-level vocational qualification, often involving a substantial period of full-time training or further study. Some additional task-related training is usually provided through a formal
period of induction.
Percentage of employed residents in SOC 1-3 in Oxfordshire
Skills enhancement and development in
sustaining growth
Education
– Oxford University Said Business School & Dept of Cont.
Ed Oxford University entrepreneurship education.
• Oxford Brookes
Apprenticeships
– Training provided by government labs and Oxford
University
– Specialist motorsport training
– New university technical college in Didcot – vocational
education focusing on science and engineering
Entrepreneurial culture, Entrepreneurship and cluster development
Entrepreneurship
 Spin-offs
Buildings
 Science parks
Networks
Image
Human capital
Recruitment
Training
Vocational
Public access to knowledge










Incubators
Cluster focused technical assistance
Network facilitators, developing academic and
non-academic networks
Mentoring services
Place marketing and development, promoting
brand image, organization of showcase events
Recruitment of graduated undergraduate and
post-grad students
Vocational courses – technical and teaching
e.g. technicians trainingPlacement schemes
Continuing professional development and
extension programmes
Public lectures and public access to libraries,
museums, galleries, sporting facilities
Direct multiplier effects
Governance
Engagement in decision-making processes
Contribution to sustainable development




Staff, student and visitor spending
Purchase of goods and services
Contribution to tourism
Support for inward investment




economic
cultural
sustainability
transport





Source: Patel 2002, Glasson 2003, author’s survey.
Universities and local economic development
contribution to the quality of the built
environment
contribution to property-led urban regeneration
provision of student accommodation
effects on parking and traffic problems
other land use issues
Science and technology-based assets
• Global brand, conveying an image of academic excellence
• Oxford University, with outstanding research and teaching,
and Oxford Brookes, one of the best performing new UK
universities
• Unique grouping of ‘big science’ and other research
facilities, including the UK Atomic Energy Authority
(UKAEA) Centre for Fusion Research; the Science and
Technology Facilities Council (STFC) Rutherford
Appleton Laboratory; Diamond Light Source, the UK’s
synchrotron facility; the Medical Research Council’s
facilities at Harwell, and the Satellite Applications
Catapult Centre
• High level military education at Shrivenham (Cranfield U).
Oxford Science Park
1991
Review of Technology
Transfer Arrangements
1994
New head of Isis
Innovation
1997
Regional Liaison
Officer appointed
1999
1960s
1970s
University &
Industry Committee
1965
1980s
1990s
Isis Innovation
1988
Isis Angels
Network
1988
Industrial Liaison
Officer
1989
2000s
Begbroke Science Park
2000
Oxford University Consulting
2001
OxSEC
2001
Venturefest
2001
Entrepreneurship Said
2006
Oxford Spin-Out Equity Management
2008
Knowledge Exchange & Impact sub-committee
2009
Oxford Invention Fund
2011
Timeline of major Oxford University ‘third stream’ initiatives
Isis Innovation, Oxford University
technology transfer company (1988, 1997)
• Isis Angels Network 1988
• Oxford Innovation Society 1990
• Review of Technology Transfer Arrangements
1994
• New CEO of Isis Innovation 1997
• Oxford University Consulting 2001
• Oxford Spin-out Equity Management 2008
• Oxford Invention Fund 2011
Locational factors mid-1980s
• Proximity to the founder’s home was the critical factor;
– 87 establishments (53%) gave this as a reason.
• 17% spin-offs by existing companies (17)
• Access to labour was mentioned by only 20 establishments
– of much more significance for manufacturing than for R & D establishments
and not at all for software houses.
• 8 manufacturing firms, 2 R & D and 2 s/w gave access to technical
information was the most important reason (7.3%).
• Very few were likely to move out of the county
• 20 establishments moved into Oxfordshire.
• Overseas rather than local markets important
• High levels of local subcontracting
2011 Questionnaire
Objective: what was locally important more or
less than in previous decades?
•
•
•
•
Company’s sector focus and product portfolio
Company’s human resources
The Oxfordshire location
Company’s engagements with academia, research
laboratories, local companies and public authorities
• Company’s financial and innovation performance
• Company’s internationalization
• Other insights into the relevance of the Oxfordshire
location to the firm and its growth.
Reasons for being in Oxfordshire
Source: Survey 2010--2011, Survey 1996-1997, Survey 1986-1987: 7 companies
Illustrative companies
Date
Type
established
Employees
2012/13
NAG
(Numerical
Analysis Group)
1976
Scientific and
technical
software
90
Penlon
1943
Medical
instrumentation anaesthetics
47
SOPHOS
1981
ICT data security
and protection
1682
MR Magnet
Technology
1983
Medical
Instruments imaging
470
SOPHOS
Source: Survey 1986-1987, Survey 1996-1997,
Survey 2011-2012
Number of Sophos’ R&D Centres
Source: Survey 1986-1987, Survey 1996-1997, Survey
2011-2012
I
Relevance of regions for Sophos’
Recruitment
Source: Survey 1986-1987, Survey 1996-1997, Survey
2011-2012
The Three Most Important Reasons
for SOPHOS to Stay in Oxfordshire
Survey 2011-2012
Survey 1996-1997
Survey 1986-1987
First important reason to
stay in Oxfordshire
Founders/key staff
home
Attractive local living
environment for staff and
directors
Pleasantness of
surroundings
Second important reason
to stay in Oxfordshire
Access to skilled
labour
Access to high quality
skilled labour (research
staff in particular)
Close to founder's home
Third important reason
to stay in Oxfordshire
Presence of other
high technology
firms and services
Reputation and prestige
of a Cambridge/Oxford
address
Oxford image
Source: Survey 1986-1987, Survey 1996-1997, Survey 2011-2012
MR Magnets: three most important
reasons for remaining in Oxfordshire
Access to skilled labour
1
Quality of life
3
Access to universities and research institutions
Relocation costs
Presence of other high-technology firms and services
Location
Founders/key staff’s home
Local informal networks
Local formal networks
Other (please state)
2
Local governance
City Deals (2012) (National Funding)
• intended to give participating areas ability to use funds better for
local needs such as training and skills, roads etc. Oxford and
Oxfordshire City Deal vision ‘to accelerate the growth of the city
region’s knowledge-based economy’
Regional Growth Fund (National Funding)
• 2.6 billion fund across England 2011 - 2016, which supports
projects and programmes that are using private-sector investment
to create economic growth and sustainable employment
Oxford and Oxfordshire Local Economic Partnership (LEP)
• Both universities represented at the Pro-Vice Chancellor level
– http://www.oxfordshirelep.org.uk/cms/
Sustaining growth: the research base and local
growth strategies
• Science Vale UK
– Harwell, Milton Park, two local district councils (Vale
of White Horse and South Oxfordshire), the
Oxfordshire Local Economic Partnership, Oxfordshire
County Council and the Science and Technology
Facilities Council (STFC) http://www.sciencevale.com/
• University science parks, proposed bioescalator
and University of Oxford’s plans for growth
Conclusions: sustaining growth - what
needs to be overcome?
• Numerous interconnected factors responsible for high tech
economy growth relating to its exceptional features
• But 2013 SQW report highlighted
• Chronic shortage of early stage investment capital
+ intransigent banks
• Extensive national visa requirements for highly-skilled foreign
workers.
• Lack of leadership from within Oxford University in local systems
of governance + lack of leadership per se?
• Lack of linkages between University of Oxford and high-tech
firms.
• National policy works on assumptions that more effect needs to be
invested in local growth strategies focused on innovation – must
therefore be things to fix!