Sam DaviesThis week saw the flotation of microchip designer Arm Holdings on the New York Stock Exchange. Arm is one of the key pillars of the’Cambridge Phenomenon’. It was founded in the early 1990s “with the team setting out to change the computing landscape from an old turkey barn in Cambridgeshire”. These days you will probably be familiar with the substantial Arm Campus on Fulbourn Road.
The flotation has generated a lot of press coverage about what valuation it was likely to achieve and what significance should be attributed to the decision to float on the NY Stock Exchange rather than in London, including a very accessible report in the Cambridge Independent.
The consensus seems to be that the flotation has been a great success – the company was valued at a staggering $54.4 billion (£43.6 billion) and according to the Daily Telegraph, “Staff have millions of restricted share units – compensation that converts to shares over time – according to company documents. It translates to an average reward of more than $400,000 for Arm’s 5,963 employees, although the figures include executives who are each likely to secure millions as well as former workers.” Indeed, Rene Haas, the chief executive, is set to receive a package of cash and shares worth $40m from the float.
There was one section of that report which really jumped out at me, a quote from Arm’s Chief People Officer:
“We are proud of our British heritage, our Cambridge heritage, and we shipped over to the Nasdaq a pub, and so in the Nasdaq studio there was a British pub serving cream teas and fish and chips and it shows how proud we are of where we’ve come from and our British roots.”
How heartening to hear that – despite its worldwide operation – its British identity, and specifically its Cambridge connection, is so highly valued by the company. I wonder if then, off the back of this flotation, Arm might be persuaded to set a precedent for other successful Cambridge companies to follow, by creating an endowment fund, similar to those enjoyed by Cambridge University colleges, for the long-term civic good of its home town?
The City Council has recently started to explore the possibility of a ‘Greater Cambridge Impact Fund’, providing an initial £200k seed funding from its own reserves, with the possibility of a subsequent £800k to be invested to leverage contributions from a variety of external sources, including both high net worth individuals and successful Cambridge companies. This may seem a novel route for a council to go down, but this graph from The Economist shows just how the local government funding gap has opened up since 2010, Authorities have had to try a variety of means of addressing that gap, sometimes with extremely damaging results.
What are the possibilities of the Impact Fund? Well, it has a stated ambition to raise between £6–15 million over a 12 year period. But let’s put that in perspective.
One hundredth of one percent (0.01%) of Arm’s $54.5 billion flotation value is $5.4 million. That would make a sizeable dent in the funding required to deliver the new Children’s Hospital planned for the Biomedical Campus, for example.
Even one thousandth of one percent (0.001%) would raise $540,000, enough to sponsor the Holiday Lunch Club programme for disadvantaged families, bring back the Big Weekend and keep our public toilets open.
Meanwhile, with this chapter in Arm’s story now closed, the media’s attention is turning to another of the Cambridge Phenomenon giants, Abcam. Abcam has been based in a striking HQ on the Biomedical Campus since 2019, but has an equally homespun ‘Cambridge’ back story as Arm, as founder Jonathan Milner explained:
“The most convenient way was to get on my bike with an ice bucket and go around all the labs and blag my way in and ask people if they wanted to buy these antibodies. It saved the company actually – if I hadn’t done that, Abcam certainly wouldn’t be here.”
Abcam’s Board are recommending that shareholders accept a takeover by US company Danaher which values the company at $5.7 billion. If the deal goes through, a thousandth of one percent (0.001%) here could perhaps ensure that the annual city fireworks on Midsummer Common aren’t the next sacrifice to balance the books.
I have commented many times on the lack of connection between the beneficiaries of the ‘Cambridge Phenomenon’ success stories, and those in the city who are not part of the ‘knowledge economy’. In March 2021, I did some research among people visiting the Queen Edith’s community food hub to understand how visible these success stories were to them. Out of 25 interviewees, 17 had heard of Astra Zeneca (but all in the context of the Covid jab, they weren’t aware AZ’s corporate HQ was a less than a mile away); 6 had heard of Arm (because they passed the Fulbourn Road campus); none of them had heard of Abcam.
The wealth being generated by this city is phenomonal. We need to be just as phenomenal in retaining it here and putting it to work for the greater good.
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Well said in total agreement
Have you or anyone else on the council approached Arm and asked them and, if so, what was their response?
An excellent review of the huge inequality of resources in Cambridge. Let’s hope these companies continue to remember and sustain their roots.
Thank you Sam
Sam agree it would be wonderful to see Cambridge lead the way on this showing the best of benevolence.
During Victorian and Edwardian times the United Kingdom had a succession of remarkable philanthropists, thinkers and reformers, who sought to improve the destiny of the community. Angela Burdett-Coutts, was an inspiring philanthropist in the East End of London one of the poorest areas of the wealthiest UK City (reminds me of Cambridge with the widest divide between rich and poor). Others with considerable wealth, such as William Armstrong an inventor scientist and engineer often overlooked, George Cadbury and George Peabody who are better known built accommodation including housing, hostels, schools and hospitals, while John Rylands’ wealth helped to found Manchester University library which is inspiring as I love books – how brilliant would it be for local Companies to follow suit and reinvent philanthropy in Cambridge .
In terms of the Council’s approach, it has certainly tried to attract sponsors eg for its arts and cultural programme and in particular to fund the Big Weekend this year – no-one stepped forward.
The Council has also consulted business leaders on the proposed Impact Fund including Cambridge Ahead. Arm is a CA member so should be aware of the issues it is trying to address.
If we are at the stage of relying on individual councillors approaching Cambridge’s largest companies to try to squeeze some money out of them, I think the game is lost.
“Civic pride” is an old-fashioned term, seemingly quite overlooked in Cambridge – Guildhall neglected; filthy, weed strewn streets, &c – which could be so re-awakened by these LOCAL wealthy businesses, so they need to be encouraged to contribute financially beyond their business rates to engage another forgotten term- “philanthropy”.
Would it be far too much to ask if all these successful companies could actually contribute to some of the essential basic resources they devour from the local community? Could they be taxed in some clever way so the money benefits the residents and not just the University, which seens to control everything?
Thinking of now and the future planning of our infrastructure. The much needed water resevoir comes to mind when we think of all the extractions these companies take from us. IF, we are to build a future for the people who work and service all these prestige buildings. Is this not a fundamental requirement for life? And of course the environment, that has been pushed down our throats and bought fear to the next generation? We truly wonder on what planet the out of touch planners are born. On the one hand they want more housing for staff of the corporate empires.
Do we see them having an after thought about the new Cancer Research Hospital (as an example) being built and how much water extraction they might take!!! Really clever planning that. Then there is the wear and tear to existing infrastructure, dare l mention congestion, pot holes etc etc.
Oh yes l did hear that ARM has contributed to the food bank, but where is that then? None other than one of the wealthiest churches near Sainsbury’s – Cambridge C3 (Cambridge Community Church) such a modern glamorous building too and so far away from their HQ!
We do have to ask ourselves why not the one nearest to them in the parish of Cherry Hinton, St Andrew’s Church Or even perhaps help pay for the library hub in Cherry Hinton and set-up a fund for educating the next entrepreneurs ha? Consuming all the services which are so near to ARM. Which is the pub, the restaurants, local shops. Services such as the doctors, dentist, schools, prime unaffordable housing. I mean what more could we ask of a take take society?
As Immy rightly points out past entrepreneurs put something back not just depleted ever deninishing resources. So what are all these companies doing for us all, as they make their billions robing our infrastructure? Oh of course we will probably have to buy our own bottled water, in the future. Or wait to have some sort of restriction regarding travel as we (or is it they) pollute our environment with emissions. Of course there will be parking at these sites for the most important people working in the world of corporate. Then of course the lovely rail station being build for us (l mean them). l wonder who is paying to fund all this? So residents of Cambridge so much prosperity coming your way. Don’t hold your breath!!!!
It’s good to see a Cambridge business such as ARM doing well. They do, of course, already contribute, not only in taxes, but in well-paid, high-skill employment.
Meanwhile, we have local government that wastes £2.3M on an absurd and dangerous single roundabout and, after spending millions on a guided busway, keeps it half-closed for a year, contributing to the traffic congestion they complain about.
So rather than scratch around for ingenious ways to fleece ARM, I think the council needs to get its own house in order.
I don’t think there’s any suggestion of ‘fleecing’ anyone, just a hope that Cambridge’s deepest pockets would acknowledge the unique role they could play in helping their home town thrive.
It’s interesting that you mention the ‘we already pay our taxes’ mindset – this mirrors a comment made to me by a HNW individual when I was asking them whether they thought the Social Impact Fund would work. But since central govt doesn’t allow Cambridge to retain the wealth generated here through the taxation system and, as the recent IFS research shows, gives Cambridgeshire a lousy per capita settlement for health, police, education, etc. we are not seeing the benefit of that locally while we are picking up all the externalities.
Very well stated Sam! Am I right in thinking that the Cambridge City Council implemented the Business Improvement Development (BID) scheme by which there was a vote of by all businesses in Cambridge City Centre as to whether they and particulary the ‘larger’ businesses should pay an extra 1% on their business rates in order to ‘develop’ services for the people using the City Centre? This was democratically voted upon and agreed and the scheme became reality. Couldn’t the City Council now introduce a similar type scheme for other businesses in the whole City: a ‘vote’ from the people as to whether they thought Businesses should pay an added levy to their business rates?