What is the new economy in Oxfordshire?

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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

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Overview

• What are the features of Oxfordshires 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?

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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
  Regionsevidence from Oxfordshire and
  Cambridgeshire

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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)

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Storper and an evolutionary economic geography
approach

• it is not enough to simply summarize the
  evidence on regional high-technology 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)

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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

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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.

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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 RD
  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 RD-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

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Oxfordshires 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

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Oxfordshires 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??

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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

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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.

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GVA per hour in Oxfordshire, Source ONS, 2013
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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
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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

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Universities and local economic development
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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 UKs synchrotron
  facility the Medical Research Councils
  facilities at Harwell, and the Satellite
  Applications Catapult Centre
• High level military education at Shrivenham
  (Cranfield U).

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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

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Locational factors mid-1980s

• Proximity to the founders 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

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2011 QuestionnaireObjective what was locally
important more or less than in previous decades?

• Companys sector focus and product portfolio
• Companys human resources
• The Oxfordshire location
• Companys engagements with academia, research
  laboratories, local companies and public
  authorities
• Companys financial and innovation performance
• Companys internationalization
• Other insights into the relevance of the
  Oxfordshire location to the firm and its growth.

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Reasons for being in Oxfordshire
Source Survey 2010--2011, Survey 1996-1997,
Survey 1986-1987 7 companies
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Illustrative companies
Date established Type 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
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SOPHOS
Source Survey 1986-1987, Survey 1996-1997,
Survey 2011-2012
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Number of Sophos RD Centres
Source Survey 1986-1987, Survey 1996-1997,
Survey 2011-2012 I
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Relevance of regions for Sophos Recruitment
Source Survey 1986-1987, Survey 1996-1997,
Survey 2011-2012
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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
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MR Magnets three most important reasons for
remaining in Oxfordshire
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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 regions 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/

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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 Oxfords plans for growth

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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!