The government’s plan to link up Oxford and Cambridge has triggered a new injection of energy into growing the UK’s – and wider Europe’s – innovation hub.
Chancellor Rachel Reeves claims this investment will add up to £78bn to the UK economy by 2035.
As two of the best universities in the world, it’s easy to see on the surface why the Oxford-Cambridge (or Oxbridge) corridor seems like the best option as Europe’s equivalent to Silicon Valley. However, this effort is ultimately just a distraction from the real issues holding back the UK’s innovation hub.
It could be argued that the government is riding the coattails of two well-known brands. Oxford and Cambridge generate good headlines and attract funding, so their strong reputation make them an easy choice.
However, this tactic completely misses the mark.
Geography isn’t the issue
Thinking about this as a geographical issue is an outdated mindset.
For perspective: California’s Silicon Valley – spanning from San Francisco to San Jose – covers an area nearly half the size of England. Even with America’s vast geography and purpose-built infrastructure, the daily commute between these neighbouring cities can stretch beyond two hours.
The focus on Oxford and Cambridge universities, which sit very close to London, means this new investment risks further fuelling the North/South divide. The government exists for the benefit of the whole country, not just a 50-mile stretch. Focus should therefore be on developing talent wherever it exists, which remote work set ups facilitate. Businesses already do this – governments should too.
Take the UK’s gaming industry as an example. The UK has historically produced some of the best game developers in the world, including The Bitmap Brothers and Renegade. What started out as pockets of young people coding in bedrooms is now a multi-billion-dollar sector. Some of the development hubs exist in cities like Liverpool and Newcastle – not London.
The industry didn’t care where the talent was located; it followed the skills, and many highly intelligent coders are based in the North West and North East of England. If the Government recognised and supported talent where it exists, similar success stories could be replicated.
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Connecting talent, wherever it is
Just focusing on the UK for a moment, while Oxford and Cambridge undeniably remain powerhouses of innovation, Britain’s true competitive edge lies in its nationwide network of prestigious universities, from Aberdeen to Southampton. Rather than artificially concentrating resources in one region, we should leverage this distributed excellence.
The UK remains a hub of innovation and a magnet for the best thinkers worldwide. Back in 2022/23, the rate of international students coming to UK universities reached a record high, according to government data. And even now, new research found that acceptances to university courses in the UK by overseas students increased by almost a third in January 2025.
However, the clampdown on immigration sets a bad precedent for attracting international talent. Home Office figures revealed that UK sponsored study visas dropped by 31% in 2024, creating uncertainty around the UK’s post-study work offer.
We should be going further to attract academic excellence from everywhere in the world. The UK remains a hive of innovation and a magnet to the best global thinkers. If you look at California and Silicon Valley, it is full of high-ranking international tech executives. The UK, by contrast, remains hesitant, fearing that these individuals will ‘take jobs’, but that is a flawed mindset. The reality is that bringing in top global talent doesn’t take a piece of the pie; it makes the pie bigger. More innovation leads to more investment, more job creation, and a stronger economy.
There are some key steps that the UK should take to make immigration easier for the world’s brightest minds. Simplifying the visa processes will help ensure the UK remains competitive in the global talent market. We should also be encouraging international collaboration by funding overseas projects that benefit UK innovation. More innovation creates stronger bilateral partnerships between nations, strengthening the UK’s position as an economic powerhouse. Restricting our talent flow contradicts – and will inevitably hinder – the nation’s plans to inject new energy into the UK’s innovation efforts.
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A review of policy
Most urgently perhaps, we must reimagine the bridge between academia and industry. Current programs like Knowledge Transfer Partnerships (KTP) and Innovate UK funding, though well-intentioned, are hobbled by bureaucracy and academic priorities that often diverge from commercial realities.
Let’s look at Innovate UK grants, for example. A business might secure £500k for a project, but the funding comes with rigid spending categories. A large portion is allocated to full-time employees, making it difficult for small companies that lack the necessary people to navigate the system effectively.
Take university intellectual property rules as well. Some institutions claim up to 40% of IP developed on campus, while others apply modest fees to support commercialisation. This inconsistency creates a maze of barriers for inventors and entrepreneurs, disincentivising innovation. What truly needs attention is investment in structural reform.
Government should provide funding on a project-by-project basis. Commercial organisations should be responsible for productising and taking R&D to market, and ensure strong feedback loops to inform and reward academics.
The challenge is though, how do you get commercial organisations interested?
This is where R&D tax credits present a very tangible solution. These credits should be linked to partnerships with academic institutions, and tax breaks should extend to products resulting from these collaborations. A portion of the revenue should flow back to universities and researchers. This creates a continuous feedback loop, with an improvement of research and greater commercial rewards.
It’s clear there are so many avenues that the government could go down to boost our nation’s innovation hub, but instead, we risk pigeonholing our resources by focusing solely on the Oxbridge corridor. True innovation thrives on diverse ecosystems, not by concentrating all efforts within a geographical hub.
The UK cannot afford to waste time and resources on a narrow geographic strategy. Our global competitors are embracing innovation and if we don’t act now to support talent wherever it exists, we risk being left permanently behind.