How can British cities attract start ups?

Cambridge, the heart of Britain's high tech industry. Image: AFP/Getty.

The origins of the “Cambridge Phenomenon” or “Silicon Fen” – the cluster of high-tech businesses based in and around the city – is often traced back to the 1960s, and the establishment of one of the UK’s first technology transfer companies, Cambridge Consultants.

The buildings surrounding the Computer Laboratory at the university bear the names of just some of the entrepreneurs and individuals that played a part in the success of Cambridge’s high-tech cluster since then: Hermann Hauser, Alec Broers, Sir Neville Mott. Today, the city is home to over 1,000 high tech companies competing with the best around the world.

While it might be one of the most famous examples, the rise of these new, highly innovative firms is not something confined to Cambridge alone. Innovation and technological change has meant that cities across the country have seen a shift towards more knowledge-intensive activity over the last three to four decades. As a result, digital, creative and professional services firms are becoming increasingly important drivers of employment and output growth in the UK.

These “new work” firms are now among the largest job creators and the most highly productive businesses in the country. They also appear to drive up demand in local economies, creating opportunities for other businesses more dependent on the domestic market, such as food and retail. Cities with more “new work” small and medium-sized businesses (SMEs) tend to be more productive, more innovative, and have higher wages and lower unemployment. Economically they’re outperforming the rest.

But few cities have seen growth in these types of SMEs in the same way Cambridge has, giving rise to more significant disparities between different places. “New work” SMEs, as we called them in our Small Business Outlook 2015 report, tend to be highly concentrated in a handful of cities. Go to Cambridge, London, Reading or Oxford and half of SMEs operate in these sectors. Travel northwards and just one in five SMEs in Burnley, Doncaster and Grimsby would be categorised as “new work” SMEs.

Proportion of “new work” SMEs, 2014. Image: Centre for Cities.

The result is an increasingly uneven UK economic map. This is evident in recent economic performance data: cities such as Edinburgh, which saw an increase in “new work” SMEs over the last 10 years, also saw high and increasing productivity and earnings.

If we split cities according to how significant new work has become within their local economies – that is, by the proportion of “new work” SMEs in 2014 – then these trends are evident over the longer term too. Since 1931, private sector jobs more than doubled in cities, such as Oxford and Reading, with the highest proportion of “new work” SMEs. By contrast, cities such as Rochdale and Swansea, with the lowest proportion of “new work” SMEs, saw a fall in private sector jobs.

Cities, “new work” SMEs and private sector jobs growth, 1931 to 2011. Image: Centre for Cities.

So why are some cities more attractive to “new work” SMEs than others? Part of the reason is that these types of firms like to locate in places where there are lots of similar firms. These companies benefit from the network opportunities cities with lots of “new work” SMEs afford – and the exchange of ideas and knowledge these interactions facilitate. Being close to their clients also matters, particularly as many of these small firms offer highly specialised products and services which require a lot of client interaction to develop.

Here’s where proximity to London often comes in. With the market opportunities a global city like London offers, it is no surprise that seven of the top 10 cities with the highest proportion of “new work” SMEs sit within a 50 mile radius of the capital. Add to that the wide pool of high level skills in these cities and strong digital connectivity, and it becomes clearer why these “new work” SMEs are not more evenly distributed.

So how do cities close the gap? There is no formula for replicating the likes of Cambridge’s success. And cities shouldn’t start trying to engineer sector-specific growth strategies. Clusters grow organically and take time to develop and mature.

Instead cities should focus on the broader conditions – skills, connectivity, suitable and affordable business premises – that help to foster growth among small, innovative firms. This all takes time, and requires both national and local government to think carefully about what different cities need.

Naomi Clayton is a senior analyst at the Centre for Cities. This article was originally posted on the think tank’s website


To beat rising temperatures, Vienna launches a network of 'Cool Streets'

A Vienna resident cools off at one of the city's new Cool Streets installations. (Courtesy Christian Fürthner/Mobilitätsagentur Wien)

Over the past several months, Austria has recorded its highest unemployment rate since World War II, thanks to the economic aftermath of the Covid-19 pandemic. With no job or a suddenly smaller income – not to mention the continued threat of the virus – many Viennese will opt for a staycation this summer.  

At the same time, last year, Austria’s capital experienced 39 days with temperatures of over 30°C (86°F), one of its hottest summers in history according to the Central Institute for Meteorology and Geodynamics.

Climate experts expect a similarly sizzling 2020 season, and city officials are now doubling down on efforts to combat the heat by launching a “Cool Streets” initiative as well as a new, state-of-the-art cooling park.

“As the city councilwoman in charge of climate, it is my job to ensure local cooling,” Vienna’s deputy mayor Birgit Hebein proclaimed at the opening of one of 22 new “Cool Streets” on 22 June.

“In Austria, there are already more heat deaths than traffic fatalities,” she added.

Hebein was referring to the 766 people the Austrian Agency for Health and Food Security included in its 2018 heat-associated mortality statistics. The number was up by 31% compared to 2017, and in contrast to the 409 people who died in traffic collisions the same year.

The project includes 18 temporary Cool Streets located across the city, plus four roads that will be redesigned permanently and designated as “Cool Streets Plus”.

“The Plus version includes the planting of trees. Brighter surfaces, which reflect less heat, replace asphalt in addition to the installation of shadow or water elements,” said Kathrin Ivancsits, spokeswoman for the city-owned bureau Mobilitätsagentur, which is coordinating the project.

Vienna's seasonal Cool Streets provide shady places to rest and are closed to cars. (Petra Loho for CityMetric)

In addition to mobile shade dispensers and seating possibilities amid more greenery provided by potted plants, each street features a steel column offering drinking water and spray cooling. The temporary Cool Streets will also remain car-free until 20 September.

A sensor in the granite base releases drinking water and pushes it through 34 nozzles whenever the outside temperature reaches 25°C (77°F) . As soon as the ambient temperature drops to 23°C (73°F), the sensor, which operates from 10 a.m. to 8 p.m., turns off the water supply.

The sensors were included in part to allay concerns about legionella, a pathogenic bacteria that can reproduce in water.  

“When the spray stops, the system drains, and therefore no microbial contamination can develop,” said Dr. Hans-Peter Hutter, deputy head of the Department of Environmental Health at the Center for Public Health at Medical University Vienna, in a televised interview.

Hutter also assured the public that there is no increased risk of a Covid-19 infection from the spray as long as people adhere to the one-meter social distance requirement.

But Samer Bagaeen of the University of Kent's School of Architecture and Planning notes that air cooling systems, like the ones used in Germany at abattoirs, have been found recently to be a risk factor for Covid-19 outbreaks.

“The same could be said for spay devices,” he warned.

Vienna’s district councils selected the 22 Cool Street locations with the help of the city’s Urban Heat Vulnerability Index. The map shows where most people suffer from heat by evaluating temperature data, green and water-related infrastructure, and demographic data.

“Urban heat islands can occur when cities replace the natural land cover with dense concentrations of pavement, buildings, and other surfaces that absorb and retain heat,” as the US Environmental Protection Agency states.

A rendering of Vienna's planned park featuring a Coolspot, which is scheduled to open in August. Click to expand.
(Courtesy Carla Lo Landscape Architecture)

Vienna’s sixth district, Mariahilf, is such an area. The construction of the capital’s first “Cooling Park”, a €1 million project covering the 10,600 square-metre Esterházypark, is designed to provide relief. 

Green4Cities, a centre of excellence for green infrastructure in urban areas, designed the park’s main attraction, the “Coolspot”. The nearly 3.40-metre high steel trellis holds three rings equipped with spray nozzles. Textile shading slats, tensioned with steel cables, cover them.

The effects of evaporation and evapotranspiration create a cooler microclimate around the 30 square-metre seating area, alongside other spray spots selectively scattered across the park.

The high-pressure spray also deposits tiny droplets on plant and tree leaves, which stimulates them to sweat even more. All together, these collective measures help to cool their surroundings by up to six degrees.

The landscape architect Carla Lo and her team planned what she calls the “low-tech” park components. “Plants are an essential design element of the Cooling Park,” Lo says. “By unsealing the [soil], we can add new grass, herbaceous beds, and more climate-resistant trees to the existing cultivation”.

Light-coloured, natural stone punctuated by grass seams replaces the old concrete surfaces, and wooden benches meander throughout the park.

Living near the park and yearning for an urban escape close by, Lo says she’s motivated to ensure the park is completed by mid-August.

“If we don't do anything, Vienna will be another eight degrees Celsius hotter in 2050 than it already is,” Hebein said.

Vienna recently came in first in the World's 10 Greenest Cities Index by the consulting agency Resonance.

“There is no one size fits all on how cities respond to urban heat,” says the University of Kent’s Bagaeen, who points out that Vienna was one of the first European cities to set up an Urban Heat Islands Strategic Plan in 2015.

In the short term, prognoses on the city’s future development may be more difficult: Vienna votes this autumn.

Petra Loho is a journalist and photographer based in Austria.