Connective Capital Spillovers

Compelling international evidence and analysis, from Spain to China to India, demonstrates that infrastructure projects produce a measurable growth in productivity and economic outcomes for manufacturing and research, on both a macro- and micro-economic level. Investment in connective capital and improving transport links not only allows for greater logistical efficiencies for the private sector, but also improves wellbeing as negative factors for individual productivity such as long, inefficient and expensive commuting can be considerably reduced. Direct government grants to businesses such as those provided by Innovate UK can help to provide crucial early stage capital for start-ups and spinouts, but a lack of decent infrastructure can act as a bottleneck to developments in a regional economy, with small businesses forced to choose between being constrained in their growth potential or relocation.  

Improved transport infrastructure can act not only as an engine to drive the government’s Levelling Up agenda, not least in towns and cities like Milton Keynes, Bedford, and Luton, but also represent an example of how the public sector can play their part as a pillar of the ‘triple helix’ of private, public and academic collaboration which forms the basis of the Arc’s success. Major infrastructure projects are the monopoly of the private sector, and with the Autumn Budget announcing £6.9bn worth of investment towards train, tram, bus and cycle projects across the UK, we should look to see how this investment can create positive spillovers in areas like the Arc, where investment in connective capital adds more to the stock of connective capital than simply a new relief road or a new train station. 

The abiding lesson of infrastructure projects on the scale of Crossrail and HS2 is that investment in connective capital often creates spillover communities, as people flock to transport hubs that allow them to quickly access their places of work and study. Investment in connective capital has already allowed the growth of the Eddington community in West Cambridge, planned from its inception as the terminus for the connected University bus route, which incorporates university faculty buildings with Cambridge train station and the Cambridge Biomedical Campus. Operated by private sector business Whippet, and with the potential for British engineering firm Aurrigo to now operate autonomous shuttles in Cambridge, the scheme nevertheless runs in conjunction with the University of Cambridge with the cooperation of local authorities. It serves the needs of businesses at the Biomedical Campus, of students and academics, and of local people who need to access services like Addenbrooke’s Hospital. A passenger on a U-Bus might be an undergraduate on their way to lectures, a cutting-edge researcher at AstraZeneca, a resident of Eddington who commutes to London via Cambridge train station, support staff for the university or local hospitals, or those with limited mobility that cannot take advantage of the city’s cycling routes. We need infrastructure projects that consider the needs of all users, we can create a tide to raise all boats – through mutually-beneficial projects that consider the needs of local residents strategically and holistically. 

The 2020 Global Infrastructure Trends Report from PwC underlined the need for the public and private sector to reconsider the potential positive spillovers of infrastructure: ‘rather than focusing on the lowest-cost option, companies need to apply a framework that considers the total economic, social, environmental and financial impact over the whole life of the asset’. Where connective capital spillovers occur, its after a holistic and strategic consideration of infrastructure wants and needs from across sectors. Development of the Oxford-Cambridge Arc gives central government and local authorities, working closely with private sector providers and operators, the opportunity to achieve so much in levelling up communities, supporting local business and unleashing the potential of the Arc. Connective capital is so much more than a train line or a bus route – it’s about providing communities and individuals with the means to fulfil their potential. In considering the infrastructure needs of the Arc, let’s make sure we go forward with that as our ultimate goal.