Information technology, telecommunications, and the life sciences remain the largest and most dynamic of the knowledge intensive sectors

Cambridge, UK. 15th March 2022:  New data covering the first full year of the pandemic (April 2020 to March 2021) shows the striking resilience of the Cambridge area to pandemic shocks. It reveals that the innovation clusters in the Cambridge city region – particularly Life Sciences and Information Technology – were the driving force of the local economy. These sectors were creating new jobs in the Cambridge city region, whereas across the UK as a whole employment was in decline. 

New analysis from the Centre for Business Research at Cambridge University shows that corporate employment in the Cambridge city region (a 20-mile radius from the city centre) grew by 1.8% overall over 2020/21. While local growth in the earliest stages of the pandemic (2019/20) was higher at 4%, this latest data shows that positive growth was sustained across the worst year of the crisis. Over the last six years the average annual growth in employment has been 5.3%, demonstrating a remarkably robust underlying rate of job creation.

For Cambridge, like other economically resilient cities in the country, the strength of knowledge intensive (KI) industries has been particularly evident. The Life Sciences Cluster in the Cambridge city region grew employment by 10.3% in 2020/21, Information Technology and Telecommunications grew employment by 6.9%. These rates contrast sharply with a picture of almost no net employment growth across all non-KI industries (0.2%).

The role of Cambridge’s Life Sciences Cluster was more prominent than ever as it led the international response to the pandemic, from vaccine development at AstraZeneca to genomic sequencing at the Wellcome Sanger Institute. The new data shows the full extent of this nationally and globally important cluster which represents employment of nearly 23,000 people across 627 firms and a collective turnover of £7.4bn generated per year. 

Information Technology and Telecommunications is the other major economic force within the Cambridge ecosystem, dominated by the success of companies started and scaled in Cambridge. This comprises over 3,000 firms that represent a workforce of over 23,000 and annual turnover of £5.3bn. 

This local growth comes in stark contrast to the picture across the UK as a whole. The UK saw an average decline in employment during this period, dropping by 1.7%. Equivalent data for the Greater Cambridge area showed a positive growth in new jobs of 3.1% across corporate and non-corporate sectors (e.g., when local public sector employment is included alongside the CBR dataset).  

The continued strength of the Cambridge economy has been a positive force in the region more widely, as business activity spreads outwards from the city. New data shows that this is particularly prevalent in recent years northwards from Cambridge. Over the last three years overall employment growth has been higher in East Cambridgeshire than in Cambridge City with an increase of 6% per year (vs. 5% in the City). However, in the case of East Cambridgeshire this has particularly been driven by growth in non-KI industries like transportation and agriculture.

Across the whole of Cambridgeshire and Peterborough there was growth of 2% per year, but there was a more mixed picture across different districts, particularly in Huntingdonshire where a reduction of jobs in high-tech manufacturing (-3.8%) and other services businesses was compensated by an increase in the number of employees of manufacturing and transport businesses, resulting in an overall flat lining of growth. After recovering from the fall of Thomas Cook, Peterborough had a well-balanced steady year with growth at 2.0%.

The resilience of the region’s employment growth through the pandemic is a source of celebration, but also underscores the imperative for maintaining the quality of life for existing and new residents of Cambridge. Housing unaffordability and unavailability, congestion levels, and other detriments to quality of life will only worsen without appropriate investments in infrastructure and the environment. Business voices have an important role in influencing central government, local authorities, regulators, and infrastructure providers to meet their statutory commitments and to understand and respond to these issues. 

The new data reinforces the important role that internationally competitive innovation clusters such as Cambridge play in levelling up. Levelling up the UK should not mean levelling down cities like Cambridge, or regions like Cambridgeshire and Peterborough. This evidence shows that the potential for job creation in Cambridge remains strong during a time of deep economic turbulence and that the success of Cambridge is a positive force over a growing regional area and that this matters to the UK as a whole. Government policy must seek to harness this potential and work with local authorities and the Mayor to maximise the possibilities in areas like the OxCam Arc for the benefit of the whole country.

Matthew Bullock, Chair of Cambridge Ahead’s Regional Economic Planning Group said: “I am delighted that we now have a decade of this important data showing what is happening on the ground in our local economy, and that it is freely open to the local community. Long may this continue. We believe strongly at Cambridge Ahead in the public availability of high-quality data and research to inform decision making at all levels about our collective future.”

After reviewing the results of the study, Mayor, Nik Johnson of the Cambridgeshire and Peterborough Combined Authority commented: “The last two years of the pandemic have been very challenging economically so the continued growth of the knowledge intensive industries of greater Cambridge underlines how important the area is for the UK as a whole and why government should continue to prioritise investment for the region. Further, the recovery in employment for Peterborough after the shock of losing one of its key employers, shows the city’s under lying strengths, which the CPCA continues to build upon, most notably with the landmark investment into the new University”.

Media Contact Information: 

Sarah Brereton, Director, Limewash
M: 07796 583 223