Business Weekly - Cambridge, UK

Europe’s leading hi-tech and biotech clusters are based in the East of England – one of the major reasons why US technology giants have laid out hundreds of millions of dollars in the last two years to acquire some of our top businesses.

The desire of America’s best to pay a premium for East of England companies – even if they are not doing that well on paper – came into sharp focus recently when Motorola paid £103m for TTPCom. The Royston company has a 3G superchip and for Motorola the potential payback from owning that Intellectual property is vast.

East of England International is the Cambridge-based powerhouse attracting record levels of inward investment from the States and also – through the assimilation of UK Trade & Investment’s local trade teams – encouraging increasing export volumes from the East of England to the US.

The backdrop against which EEI is operating could hardly be more vibrant: Britain has not only obliterated the negative trade gap with the United States but turned the picture around.

Last year, UK exports to the US topped $51bn while imports from America to the UK were $38.58bn.

UK exporters have now taken these successes to an even higher plateau: In the first four months of 2006, British exports to America topped $16.77 bn (up $1bn year-on-year) while US imports to Britain were $14.64bn – also higher but not about to upset the new order of things in terms of the transatlantic trade balance.

North America accounts for around 50 per cent of all investments into the East of England and for some 42 per cent of total inquiries received by EEI in the last year.

Of the 2,000 foreign-owned businesses trading in the East of England, America accounts for the majority.

No wonder they call it a ‘special relationship,’ and it is one that EEI chief executive James Gray will not be taking for granted.

He said: “We are doing more and more with China and India but need to be very careful not to take our eyes off the United States and Canada, which is also strategically important.

“If anything we have ramped up our efforts to further improve the region’s visibility in North America by supporting important technology expos and allowing local companies to have a presence at these important trade shows in Chicago and elsewhere.

“Good orders have been reported in the early aftermath of the recent Globalcomm show that EEI helped local companies attend, for example. We have also improved this region’s visibility in the wireless cluster in San Diego and elsewhere in the States.

“Our San Jose office is also actively promoting East of England businesses with major technology players in Silicon Valley and further afield. All in all, I would say the picture is looking pretty good to further increase two-way trade between here and the US.”

The EEI teams are taking a more overt brokering role in their approach to promoting both inward investment from the States and increased exports from this region to the US.

Gray said: “We constantly review the effectiveness of our strategy and this includes our Silicon Valley operation. We have made some outstanding contacts through our San Jose office and have just strengthened our team there.

“One of our aspirations has remained to encourage more small, smart East of England technology businesses to establish a foothold in Silicon Valley and we are close to rolling out a very exciting initiative designed to encourage exactly that. We can make it a lot easier for these businesses to do well in the American market.”

Gray revealed that EEI was currently negotiating with its San Jose landlords an attractive package that would allow East of England SMEs to establish a pod at the Silicon Valley facility on a 30-day notice basis that would significantly reduce the cost and risk normally associated with a foray into the world’s leading technology corridor.

“The easy in, easy out basis of the agreement we are endeavouring to secure makes this a very attractive option for our smaller but exciting technology businesses,” said Gray.

“They also get the benefits of access to excellent mentors and networks, helping our executives identify who they should be having a cup of coffee with, which organisations they should be getting close to – generally fast-tracking the getting-to-know-you process.”

Gray also revealed that this initiative was being replicated in other key trade centres of the US.

“We want to give our companies a few soft landing spaces in America like the Valley and Texas – major seats of technology – so they can establish a sales presence in a critical market much quicker than would otherwise be possible.

“We are also increasing our support activities on behalf of young, fast growth companies; we really need to get as much support as we can to these businesses.

“We have a fantastic consulate network in the US and a lot of our technology companies don’t realise how cheap and easy it is to access this know-how and door-opening expertise through our excellent trade teams.

“Our trade teams have a focus on the US market that is second to none, allied to fabulous contacts. It takes so much hassle, time and cost out of the equation for our ambitious young companies.”

EEI also supported Cambridge Wireless’ recent mission to San Diego – a meeting of Europe’s top wireless cluster with the world number one – and the collaborations likely to stem from this initiative will help the Cambridge wireless cluster mature further on the world stage.

Some terrific partnering opportunities have been identified as, once again, EEI takes away the pain and maximises the gain.

EEI is working to replicate the model which attracted Eastman Kodak to open dialogue with the University of Cambridge and establish a research operation at Cambridge Science Park.

Sam Weller, Kodak’s European operational chief, worked closely with EEI, the University and Cambridge Network to chart a planned and strategic entry to the Cambridge research corridor and this approach could prove the prototype as other major American organisations eye the East of England.

Gray said: “No-one would argue against the fact that we need more organisations like Intel and Microsoft Research to put down roots here but you need to pick apart the dynamics which prompted their arrival.

“We all need to be much more proactive – chasing these businesses and persuading them to come here. It took Intel 30 years from its start-up to come to Cambridge. They’d set up an irish operation before they came here. Why? Because the Irish chased them. We have to wake up to the fact that while we have a phenomenal offering here, we are not the only show in town.

“These businesses are looking globally: One day we could be partnering with key players in San Diego and Dallas and the next day we may be competing with them for business. Our intention is to build on the Kodak model – what made this region a ‘must have’ for them – and go out looking for some big corporate venturing opportunities between our respective regions. That might be the key to really unlocking the full potential of our businesses.”

As far as pure inward investment opportunities go, EEI is determined to back its aces by dealing out the full deck. “Our approach to companies keen to relocate here is to paint the big picture,” says Gray; “to tell them that if they come here they are buying into the whole range of advantages – brilliant science & technology, outstanding interface between world-leading universities and clever technology businesses, world-class networks and so on.

“That is the smart thing for them to do; on the reverse side of that, the dumb thing to do would be to ignore the benefits of our clusters and superb brainpower, take the technology and whip off back to Tallahassee.

“Putting down roots here will enable American businesses to stay close to the ears and eyes of future technological advances emanating from the East of England and that will give them and us much, much more in the longer term.”