Lord Sainsbury of Turville

Launch Enterprising Oxford - The Growth of the Oxfordshire High-Technology

It is, I think, an enormously interesting story, because Oxford has undergone extensive changes over the past few years in terms of its economy. In the 1960s Oxfordshire was a sparsely populated, agricultural county with a famous university, government research establishments and a car factory. The economy was based on brewing, agriculture, blanket making, food processing and the motor industry. In recent years the breweries have closed or relocated, agriculture has declined and the last blanket-making firm closed in 2002. However the motor industry invested in new technology and remains highly successful and Oxfordshire is now home to the new mini. The decline in the traditional sectors is partly due to a lack of investment in innovation, and partly due to the emergence of new products and processes. There was a need to move on and, for Oxfordshire, this meant developing activities based on its knowledge assets held in a cluster of public and private research organisations. In Cambridge, the science park was established in the late 1960s in order to encourage growth of science-based industries. In Oxford it was left to Oxford University academics and graduates to set up companies such as Oxford Instruments and Research Machines, both of whom are major players in the high-tech industry today.

High unemployment in the 1980s led to a change in local planning policy, which acknowledged the importance of science and technology based companies and which resulted in planning approval for a science park in Oxford.

What this report shows is that Oxfordshire's high-tech sector is now one of the largest in the UK. There are an estimated 1,400 high-tech firms in Oxfordshire, with a combined work force of over 37,000 people. Oxfordshire is also experiencing a faster growth rate in high-tech employment than any of the other 45 English counties, increasing at a rate of 40% between 1995 and 2000 compared with growth rates of only 18% nationally and 25% in the South East. This growth in enterprise has transformed Oxfordshire into one of Europe's leading centres for enterprise, innovation and scientific knowledge. 66% of Oxfordshire's current high-tech firms have been started since 1991. By 1995 the Oxfordshire high-tech economy was composed of 6 main sectors: computer services, electronic engineering, instrument engineering, R&D, data processing machinery and chemicals/bio-tech.

Now Oxfordshire is noted in Europe for having one of the highest concentrations of scientists and technologists in its work force. In the 1980s it contained a quarter of all the R&D workers in the South East. Many scientists chose to live in Oxford, which partly explains why the homegrown firms dominate in Oxford, many of them being formed by eminent scientists.

I am delighted to be here today at the launch of the report because the success of Oxford highlights the fact that it is such high-tech clusters which are spearheading the re-structuring of British industry, which is so necessary today. Faced with globalisation and major advances in science and technology, and given the outstanding science and engineering base we have in this country, the right strategy for this country must be to compete in high value-added, high tech industries. We can't compete on the basis of low labour costs. We have to compete on the basis of our knowledge, skills and creativity. And as the report shows, Oxford is playing a very successful role in this re-structuring. It is because of the need for re-structuring that the Government has put major additional resources into the science and technology base. Today the science budget is rising at 7% p.a. in real terms and, as a result of SR2002, it will rise at a rate of 10% p.a. in real terms over the next 3 years.

We have also put significant additional funds into knowledge-transfer with such schemes as University Challenge, a brainchild of Sir David Cooksey, Science Enterprise Centres, and the Higher Education Innovation Fund. The exciting thing for me is that these schemes are already producing valuable results. The recent publication of the second annual Higher Education Business Interaction survey revealed that during 2000-2001, there were 248 new spin-off companies from British universities, an increase of 22% on the 203 in the previous year, and 70 a year on average in the 5 years before that. I think it is also interesting to note that in this regard the performance of British universities does not compare badly with that of American universities. The figures show that in 2000-01 UK universities produced one-spin off for every £12million of research expenditure, compared with one for every £46million in the US. I believe that there has been a major cultural change in British universities in recent years and that British universities have risen magnificently to the challenge of playing a full part in the new knowledge-driven economy.

Finally, in the 1998 Competitiveness White Paper, the Government highlighted the importance of clusters in economic development. Since then the RDA's have done a great deal to support clusters, working with the Government and most of them are now, I am glad to say, getting up Science and Industry Councils to help them in this work.

Oxfordshire today is an exciting place to be. At the start of the new millennium employment in the county's high-tech economy was 60% higher than at the end of the 1980s. There is a very strong attraction to Oxford for high-tech entrepreneurs, borne out by national surveys on the relative attraction of various UK locations for business. Oxford is continuing to grow and to support its successful economy, it has to deal with the continuing issues of pressure on housing supply, transport infrastructure, industrial sites, the labour market and maintaining the environment and character of Oxford. This is a challenge that almost all high-tech clusters across the world have to face, and I am sure that Oxford will rise to this challenge as it has to the others it has had to meet. For the health of the UK economy, it is vitally important that it does so.

The report also highlights another feature, which I believe is typical of many high-tech clusters around the world, the role played by entrepreneurial individuals in getting them started. In the case of Oxford by people like Sir Martin and Lady Audrey Wood, Paul Bradstock, Ian Laing, Nicholas Cross, Sir David Cooksey and Dr Tim Cook. Institutions such as The Oxford Trust, Oxford Innovation Ltd, Isis Innovation, the Oxfordshire Investment Opportunity Network, Oxfordshire BiotechNet and Venturefest Oxford have also played a major part in the success of Oxford. Neither of these lists are exhaustive, but they do show, I think, how much the success of such clusters depends on the commitment and inspiration of key individuals.

In this connection I would particularly like to highlight the contribution of Sir Martin Wood. Martin is the founder of both Oxford Instruments and The Oxford Trust. Oxford Instruments has grown strongly since it was set up in 1959 and, like all such successful companies, has spun-out around 20 new firms. The Oxford Trust was established in 1985 with an aim to encourage the study and application of science and enterprise in Oxfordshire, and has played a major role in the success of Oxford. Martin has brought energy, drive and commitment to high-tech development in the county for over 40 years and I hope he continues to do so for many more.

When I go abroad, it sometimes seems as if Cambridge is the only high-tech centre in the UK. I hope that this report will show that Oxford is now an equally successful cluster and will go some way to demonstrating that there are today many high-tech growth points in the UK economy which in total are having a major impact on the restructuring of our economy.