OPEN LETTER to MARTIN WOLF of the FINANCIAL TIMES

A RESPONSE TO HIS ARTICLE: ‘Keep the goose fat to feed the regions’ Financial Times, 02.03.2007

Dear Sir

I write as the Director of the Oxford to Cambridge Arc (O2C Arc), charged with the remit of
assisting the innovation community of the area that stretches between and includes Oxford
and Cambridge create one of Europe’s premier knowledge based economies.
Invest in Success!

I refer to your article (Keep the goose fat to feed the regions – FT, 02.03.2007) which is an
important contribution to the ‘invest in success debate’ which colours discussions concerning
the economic development of the Greater South East (GSE) region. Many economists and
planners maintain that the GSE underpins and drives the economy of the UK. You write in
your article that, “London, the south-east and the east of England...(the GSE)…are financing
a huge transfer of resources to the rest of the country”.
The ‘Golden Triangle’ is of National Importance

The GSE is, in turn, driven by a core area to which you refer in your article as the ‘London
city-region’. I would define the core area driving the economy of the GSE as that which is
loosely bounded by Cambridge, Oxford and along the Thames Valley to London. In the past
this area has called the ‘Golden Triangle’1. It is within this area of the UK that can be found
the majority of the country’s innovative firms (financial engineering activities in the City of
London of course, but also including science base innovative companies with protected
intellectual property [IP] in Oxford and Cambridge, and large corporate operations spread the
length and breath of the Thames Valley / M4 corridor). Indeed, data from the Cambridge
based VC-cum-consultancy, Library House, demonstrates that in 2006 the vast majority of
the 1.75 billion euros of funds applied by VCs in the UK found a home in the Golden
Triangle. The Golden Triangle not only contains the UK’s (and arguably Europe’s) only
truly global city, but it also drives Innovation UK plc. It is not far-fetched to posit that the
UK economy will stand or fall according to the success or failure of the Golden Triangle.
Action is needed in order to support the Golden Triangle!

If the UK is to ‘out-innovate and out-perform its competitors’ as the Chancellor would have
it, (2) and maintain and strengthen its position in an increasingly knowledge soaked and
competitive global economy, it is important that attention is devoted to an understanding of
what actions are required in order to secure and enhance the economic success of the Golden
Triangle. This is especially so as the area is increasingly bedevilled by unaffordable housing,
growing congestion, the lack of appropriate skills (both high level and cross disciplinary, and

of a more blue collar nature), problematic economic governance, and an IP to license

business model that characterise innovation hotspots such as Oxford to Cambridge and rarely
(if ever!) spawns ‘Big Gorilla’ companies that many in Government (and the private sector)
are hoping to see established. As you know, arguments abound in the GSE about the relative
importance of infrastructure interventions in order to better manage growth and capture
agglomeration economies! Within your article you ask whether government ‘is remembering
to feed its golden geese’!

To be more specific; concern that the Cambridge Cluster ‘is stalling’ (Financial Times,
29.09.2006) may be premature (and even misleading). However, Plastic Logic (a Cambridge
based company and a potential big gorilla) has decided to grow in Germany, the
nanotechnology company, Vistec of Cambridge, has left for Albany in the States, and debate
in Cambridge is increasingly focused on the lack of critical mass that characterises the high
technology economy of this City ‘innovation hotspot and incubator’ (3). The need for a
(national) debate concerning how the Golden Triangle (and its various complementary and
constituent sub-areas) can be supported and developed is, perhaps, urgent. You are right
(though if I may take a little bit of a liberty with your words) – ‘keep the Golden Triangle fat
to feed the regions’.
We must clearly demonstrate how The Golden Triangle supports UK plc

But perhaps it is necessary to be clear as to how the current strength and the future
development of the Golden Triangle can benefit the rest of the Country. Whilst academics
such as Mike Kitson and his colleagues of Cambridge University forcefully and, perhaps,
convincingly argue against the dispersal of innovation assets and effort (4), and for
concentrated efforts in existing innovation hotspots, political realities demand that spill-over,
grown-on-cum-redistributionist actions are given serious attention (unless of course the
Golden Triangle/GSE goes down the secessionist route alluded to in your article!). I have
been asked many times by politicians and Government officials; ‘What has this (the O2C
Arc) got to do with Newcastle?’
The nation needs to know why the Golden Triangle is so important, what is likely to happen
if that importance is not recognised and action subsequently taken, the type (and cost) of the
required actions, and the benefits that would accrue to the Golden Triangle and to UK plc. A
form of business as usual versus interventionist scenario planning exercise may be necessary.
A number of organisations operating in the Golden Triangle area are considering, I believe,
addressing such a task.
Spread ‘Golden Triangle Benefits’ across the UK; take action re the ‘Marginalised’

Indeed, whilst it is vital to focus on ensuring the strength and continuing success of the
Golden Triangle (Europe’s major innovation hotspot with, for example, the largest Life
Science cluster in Europe) it will be important to demonstrate what actions can be taken in
order to ensure that those communities currently ‘excluded’ from or marginal to the
innovation economy are supported as they struggle to develop an innovation and
entrepreneurial culture. Such actions are important for the central portion of the O2C Arc
area, though the type of innovation economy possible for such areas though related to that of
the two innovation hotspot ‘poles’ of the O2C Arc may be significantly different from that
which currently characterises the two innovation hotspot ‘poles’. Further, the knowledgebased/
innovation economy is unlikely to be the saviour of sways of UK society, and as Hudson has

discussed we may have to seriously think about the informal and social economy
as a source of employment for those left excluded (5).
The Role of London in a ‘Golden Triangle’ Development Strategy

Further, it is important to be clear as to the role of London in the development of the Golden
Triangle. London provides finance and innovative financial engineering; but much more.
Many firms seeking first rate and globally experienced managerial staff and professional
support gravitate to the Capital. Most importantly, London is a major (if not Europe’s most
important) centre of international business connections. London is a bridge to world markets
for many companies. UK firms, and foreign entrants desperate for global reach, quite rightly
look to the wealth of international (business) connections that London has on offer. This is
tremendously important today as innovation is set to go global in a big way. Indeed, for
‘clusters’ to succeed (our Government’s industrial and innovation strategy highlights the
importance of promoting clusters) it is not just local, geographical proximate networks of
firms that matter, it is increasingly international connections, integration horizontally across
borders, and international collaboration that lends competitive edge to business.
Ensure Debate and Action!

I do hope that your article will be widely read and encourages a debate (followed by action!)
as regards the importance of the Golden Triangle (and its constituent and complementary
sub-areas) for UK plc, and how the related goose fat can be used to feed the regions. It is a
tremendously important topic, and it is not too far fetch to state that the outcome of the
related debate will determine the future success (or otherwise) of UK plc. As the Chancellor
has said – “economies such as ours have no choice but to out-innovate….our
competitors’….., but perhaps we can add – ‘….by collaborating at home (within the
framework of the O2C Arc and Golden Triangle) and within the global networks of
innovation hotspots…” Keep the Golden Triangle fat to feed the regions!

Milton Keynes
March the 3rd 2007
Controversy Corner Article No 51