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In Britain, clusters have long been
part of the industrial landscape.
During the 19th century, Manchester
was the epicentre of the international
cotton and textile trade. By 1871, the
city and its Lancashire satellite towns
had become collectively known as
‘Cottonopolis’ and accounted for
32% of global cotton production.
Step forward to the 21st century
and clusters are equally as important,
especially in growth sectors of
the economy. Britain has 31 major
business clusters that, according to
McKinsey, contain fewer than 10%
of the UK’s businesses but generate
20% of national economic output.
More than half the UK clusters
are global centres of excellence
for their industry. They include
long-established clusters such as
the ‘Golden Research Triangle’ of
advanced life sciences between
Oxford, Cambridge and London, the
Lloyds Insurance Triangle in London’s
EC3, the Scotch whisky industry and
the South Yorkshire metals industry.
Also there are newer ones including
the London Silicon Roundabout/
Shoreditch tech cluster and the reborn
Motorsport Valley in the Midlands.
Scattered around the UK as they
are, these diverse business clusters
are helping their host cities develop
a unique selling point and establish
a solid economic base to compete in
today’s increasingly globalised world.
LEAD STORY
Britain has 31 major
business clusters
that generate 20% of
national economic
output
In addition to the established sectors,
there are a number of emerging
growth clusters which, if they thrive,
will contribute to the long term health
and sustainability of the UK economy.
These include new developments
such as digital tech and creative
businesses clusters as well as
significant developments within the
existing Golden Research Triangle and
Midlands Motorsport Valley clusters.
More than
half the UK
clusters
are global
centres of
excellence
for their
industry
Perhaps the most famous and
certainly most successful cluster
the world has seen is Silicon Valley
in California. This began as a tech
hardware focused cluster with
processing and semi-conductor
companies like Intel driving
innovation for enhanced computing
capabilities in the 1980s and 90s –
hence the name ‘Silicon’.
While many of these companies
still have a local presence, their
footprint and importance has been
dwarfed by other predominantly
software focused businesses such
as Google, Apple and Facebook and
the thousands of start-ups aiming
to be the next big thing. In fact, the
Valley’s continuing evolution is a
clear demonstration of the dynamic
nature of a cluster and how it can
develop through its own innovation
and value creation.
Distinctive clusters overlap spatially,
potentially and functionally. For
example, there is a very clear
overlap between Motorsport Valley,
the Golden Research Triangle and
High-tech and ICT (Information and
Communication Technology)
M4 corridor due largely to data
analytics and science being as
critical to successful racing cars as
to genetics and mobile telecoms.
C
lusters are defined by business
guru Michael Porter as
“geographic concentrations of
interconnected companies and
institutions in a particular field”. In
everyday terms they are eco-systems
in which people meet, exchange
ideas, develop innovations and create
businesses and, by doing these things
together, add value to the whole.
The origins of clusters are often
largely accidental and have tended
to evolve to fill market niches that
governments and existing businesses
didn’t anticipate. Typically, the
strength of a cluster lies in the
physical interplay of factors such as
talented individuals, nimble small
businesses, heavyweight corporations,
world-class academic centres, willing
investors, appropriate infrastructures
and supportive local and national
government agencies.
A British Tradition
Silicon Valley
Mapping Britain’s
Clusters
High Growth Clusters
Manchester’s 19th century cluster of international cotton and textile trade
PERSPECTIVES
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LEAD STORY