Anne Hyland 

Corridor lined with gold

Along the M4 corridor construction cranes fight for space against the billboard size names of trail-blazing multinationals such as Microsoft, Oracle and Motorola.
  
  


Along the M4 corridor construction cranes fight for space against the billboard size names of trail-blazing multinationals such as Microsoft, Oracle and Motorola.

Technology companies and internet start-ups have spread west from Slough to Swindon, sweeping up Reading, Maidenhead and Newbury to create England's silicon corridor.

The emergence of the new economy has seen US companies flock to the Berkshire countryside. More than 40% of the technology companies along the M4 have US roots and their investment in the area has given rise to an internet gold rush. The region ranks only behind London in terms of wealth in England, with a gross domestic product of £25bn for a population of just 2m.

Even diehard valley types from California have been lured here. "I lived in silicon valley in California for 22 years and watched it grow from a pretty small operation. Something similar is happening in this area, especially with the internet boom on top of the technology boom," says Jim Ambras, vice president of engineering at AltaVista's European headquarters in Maidenhead.

Silicon valley's cash culture has also arrived. The local newspaper in Reading claims that rents for a two-bedroom flat are on a par with London at between £600 and £900 a month. It appears there are as many BMWs as Ford Mondeos. Recruitment agencies litter the town centre, their windows plastered with ads begging for call centre staff, data entry employees or information managers.

Gridlock along M4

The hotels are full and at least a further three are on the drawing board to be developed to meet the demand. Peter Sullivan, director of sales and marketing at the Renaissance Hotel, said: "Ten years ago Reading was not the sort of place you would consider going to, but now all that has changed. Now they're saying Cisco, one of the largest companies in the world, is looking to move their UK headquarters here."

Mr Sullivan is one of the lucky ones. He brought his home on the Reading outskirts in the seventies for a tenth of what people are now paying to climb aboard the area's booming property market.

Progress brings it problems. The most frequently heard gripe is that the local infrastructure has failed to keep up with the explosion of people and new business.

The gridlock of traffic along the M4 and the ineffectiveness and unpredictability of public transport are the main complaints of three in four companies in the area, according to a survey by the Thames Valley Economic Partnership.

However bad the situation here - it is still better than in the US. "This area has a lot of great things going for it, especially commuting which is nothing like silicon valley where for some people it can be a two-hour journey each way," said Mr Ambras of AltaVista. The US-based search engine and internet portal employs about 50 staff in Maidenhead.

It is not just new economy companies that have benefited. Slough Estates has been developing industrial and more recently technology parks in the area since 1920. Now more than 22% of its non-retail UK rent roll comes from "new generation businesses" such as e-commerce, computers, communications and biotechnology.

John Heawood, executive director at Slough Estates, argues that the benefits of the technology boom outweigh the transport and housing issues. "There isn't anywhere in the UK or overseas where you have economic success and you don't have a problem with congestion and so forth. I would rather that, as a challenge to face, than an economic wasteland. It's the price of success."

Highly skilled information technology staff are hard to find, although companies are looking to graduates from local universities and possibly even school leavers, who would start as trainees, to fill the gap. Local unemployment has plummeted from 9% a decade ago to almost zero today.

Intel, which employs about 1,800 people in the UK, deals with its labour issues by looking to Europe, India or the US for those staff it cannot recruit locally. The area's productivity rate is an impressive 27% higher than the UK average.

Computer group Oracle says it picked Reading as its base because the M4 corridor has become a magnet for technology and computer workers. Nine out of 10 of its staff are graduates.

'Logical solution'

The huge influx of skilled people into the area has also attracted internet start-ups and small software firms who know their location is crucial in poaching from that labour pool.

Outside Reading, Intel is building a $150m European "internet-server farm" offering e-commerce support to corporate customers. The site was chosen over Amsterdam and Frankfurt and will employ 250 people.

"We wanted a site that was close to the airport; to telecommunications network access points; to the hi-tech industry and that was close to the financial community," said Rod Jackson, director of operations for Intel Europe. "It was a logical solution because of the telecommunications network and internet carriage activity that is established here."

Most companies agree that brief commuting to London is also a big advantage when trying to recruit staff from overseas; not everyone is keen to live in smaller towns.

"I don't think anyone in their right mind would live in Slough," said Peter Allen, finance director at biotechnology group Celltech. His bluntness doesn't dent his affection for the town that has been Celltech's head office for the past 10 years. He says most of the 400 staff live in London or the catchment area of the M4.

Allen's words reflect the thoughts of poet laureate John Betjeman who passed through the area just before the second world war. His famous poem invited "friendly bombs" to fall on Slough be cause industry and concrete boxes had made it unfit for humans.

Judith Anthony, chief executive of the Thames Valley Economic Partnership, says the success of the M4 corridor is a credit to the government's ability to win foreign investment against cities such as Frankfurt, Amsterdam and Paris. However, if the area is to remain a key part of the UK economy, further public funding is needed to provide improved support facilities. If this doesn't happen the private investment pouring into England's proudly proclaimed "silicon valley" may disappear as quickly as it came.

 

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