Latest quarterly growth research shows robust response from Cambridge business to the pandemicPublished: Thursday, August 26, 2021
The employment of Greater Cambridge businesses has continued to grow during the height of the Covid-19 pandemic, driven by high levels of job creation in life sciences and information technology clusters, new research has shown.
Knowledge intensive sectors in the city region, such as life sciences and healthcare and IT, continued to expand and grew five times faster (+6.9%) than other sectors (+1.3%).
Overall corporate employment growth slowed from 5% in 2018-19 to 3.9% in 2019-20 – which the report states is “still a significant rate of growth considering the unprecedented challenges” brought on by Covid-19.
The figures emphasise the robust performance of the Greater Cambridge corporate economy during a period which included the first national lockdown in England.
The report is based on a sample of companies covering 72% of corporate employment in Greater Cambridge, and alongside assessing employment growth also looks at how turnover has been impacted.
It finds that turnover suffered a modest decline but fared worse than employment, highlighting the important role that the furlough scheme has played in protecting employment to date.
The research – which provides valuable new insight in the context of the local and UK recovery policy – was funded jointly by the Greater Cambridge Partnership and Cambridge Ahead, and was carried out by the Centre for Business Research at the University of Cambridge.
Key findings from the research include:
- Corporate employment growth in the Greater Cambridge area has slowed down from 5.0% in 2018-19 to 3.9% in 2019-20. However, there is variation in these growth rates across both industry sectors and firm sizes.
- Employment growth in Greater Cambridge has been five times faster in knowledge intensive sectors (+6.9%) than in non-KI sectors (+1.3%).
- The reduction in the rate of growth of employment over the last two years has occurred in both KI and non-KI sectors in both Cambridge and South Cambridgeshire, but the growth of KI sectors has remained notably stronger than that of non-KI sectors (8.8% in Cambridge and 6.0% in South Cambridgeshire).
- Life sciences and healthcare (+10.6%), information technology and telecoms (+10.0%) and wholesale and retail distribution (+5.8%) were the fastest growing sectors during 2019-20.
- Many service sectors suffered reduced customer demand as a result of the impact of Covid on their businesses. A relatively large decline in employment occurred in property and finance (-1.5%) and other services – e.g. hotels and pubs (-0.8%).
- Life science and healthcare, wholesale and retail distribution and manufacturing (i.e. low- and med-low-tech manufacturing) were the only sectors to have seen employment growth accelerating in 2019-20 despite the unfolding of the pandemic.
- The sectors with the largest fall in employment growth relative to 2018-19 are knowledge intensive services, other services and property and finance. Employment also slowed in high-tech manufacturing, reaching -1.2% in 2019-20 compared with 1.0% in 2018-19.
Cllr Neil Gough, Chair of the GCP’s Executive Board, said:
“This is important data as it shows how the Greater Cambridge economy stood up to the challenges thrown at it by the pandemic, with continued growth and opportunities despite the impact of the first national lockdown.
“Our innovation economy will continue play a central role in our recovery and we need to ensure that more people and businesses are able to share in and emulate that growth and prosperity as we move forward together.”
Dan Thorp, Director of Policy and Programmes at Cambridge Ahead, said:
“This latest data shows us clearly that whilst the pandemic has hit many hard, the Cambridge economy remains notably resilient and our world-leading clusters of innovation will continue to have a central role to play in a sustainable and inclusive recovery.”