COMMENT We have become accustomed to reading about extraordinary economic data during the past few months, but the latest office and laboratory take-up figures for Oxford and Cambridge are, on first look, still quite remarkable given the tumultuous April, May and June we have experienced and the current uncertain outlook for the UK office market. But then, the university cities are quite remarkable places, and have proven so during this pandemic, so perhaps we should not be surprised.
Take-up over the first half of the year reached 85% of the 10-year average in Oxford and 40% in Cambridge, although in the latter market there was a significant amount of space under offer at the end of June. Adjusting for this, we estimate take-up would be closer to 80% of the 10-year average. The life sciences sector was inevitably a key driver of demand, and the availability of lab space in Cambridge fell to just 3.5% by the end of June. Meanwhile, take-up in Milton Keynes is currently running in line with the 10-year average and ahead of 2019.
To put this in context, the UK’s major regional cities, on average, saw 30% of their 10-year mean take-up over the same period. Given the disruption and uncertainty during the latter four months of H1, this is a remarkable outcome, and testament to the unique business structure of the Oxford, Cambridge and Milton Keynes cluster.
Why critical mass is crucial
Oxford and Cambridge combined have seen a near threefold increase in scientific and technical employment over the past decade. The latest ONS data shows a 72% increase in science and tech jobs in Oxford and Cambridge between 2017 and 2018, compared with an 8% growth in overall employment. The cities also saw some of the lowest levels of staff furloughed in the country at 13% and 11% respectively, compared with a national average of more than 24%.
As the government looks to the future of the UK economy and the levelling up agenda, the importance of science and technology to the national economic future is evident. While Oxford, Cambridge and London are defined as leading life sciences locations, cities such as Manchester, Bristol, Edinburgh and Leeds are identified as established or emerging locations, potentially providing the springboard for future economic growth.
Given this, one of the key learning points from the Arc’s experience in the current crisis is the importance of critical mass. This is not only in the context of expertise in the universities and research institutes, but also the depth of private sector knowledge and facilities.
The Arc’s response to the pandemic has emphasised the value of having high-tech manufacturing facilities cheek by jowl with laboratories, research institutes, teaching hospitals and the like. Together, the area has demonstrated the power of collective ingenuity and collaborative culture.
Focus on strengths
Such depth cannot be created overnight, and a long-term strategy with the involvement of a range of parties is needed, whether through the provision of investment funding for SMEs, laboratory space on flexible leases, infrastructure or strategic planning for housing to attract the most important resource of all – skilled staff.
This latter point is the greatest challenge for all locations, but perhaps it may be aided by our new-found ability to work flexibly, as both high-skilled staff and organisations are able to look further afield for jobs and workers alike. The potential for a further expansion of scientific collaboration across the UK could be a positive side effect, again supporting a levelling up agenda.
But the crisis has also highlighted the importance of not neglecting our areas of strength. There are many companies across the Arc, particularly SMEs in the science and technology sector, that have encountered severe challenges during the Covid-19 pandemic.
Lower levels of funding availability and delays in progressing trials and testing programmes impacting on funding milestones have combined with the ongoing physical challenges of available space, housing affordability and high-skilled staff shortages. All these factors will have long-term implications if not addressed.
The pandemic has brought science to the forefront of public consciousness. Policy consciousness needs to follow suit.
Sue Foxley is research director at Bidwells
