Business Secretary Greg Clark says the health of the Cambridgeshire and Peterborough economy is crucial to the UK and the Government’s industrial strategy.

And he supports further devolution and more local decision making to better seize opportunities and tackle challenges like those outlined in the Cambridgeshire and Peterborough Independent Economic Review (CPIER) report, a copy of which he received from Mayor James Palmer at a London ceremony.

In response the Mayor said he stood ready to meet the challenges to the economy raised in the CPIER report. His key message to the Secretary of State was to match his ambition, through both investing in the Cambridgeshire and Peterborough economy and through further devolution of powers to enable the Combined Authority to meet the housing, transport and skills challenges raised in the report.

The Mayor has already publicly supported many of the recommendations in the CPIER study including a call to increase house building targets in Cambridgeshire and Peterborough from about 4,700 per year to 6,000-8,000 per year, and the need to urgently upgrade rail and road infrastructure, including the A47, A10 and M11 – as well as the delivery of the Cambridgeshire Metro.

Mayor Palmer said: “The excellent CPIER report highlights not only that growth in Cambridgeshire and Peterborough has been stronger than official figures have suggested but also that the Cambridgeshire and Peterborough economy is strategically significant for the future of the UK.

“The report was also clear that the serious challenges our economy faces with a lack of housing of all types, of underinvestment in transport infrastructure, and skills shortages, cannot just be tackled locally, but also requires the support of central Government.

“That’s why it was so important to present this report to the Secretary of State, including my plans to tackle the issues it identifies. This was an opportunity to say to the Secretary of State that we have a remarkable economy, that is a hub of innovative and dynamic enterprise with businesses that are among the world’s best. Furthermore, we now have an independent and in-depth evidence base to make a compelling case for action.

“The danger is that if we do not take action, our economy risks tailing off, and our internationally significant businesses may seek to relocate – not to other parts of the UK but overseas to Europe, the US and East Asia – and deal a significant blow to UK plc.

“I have always been quite clear that given that Cambridgeshire and Peterborough contributes a net £5 billion per year to the Treasury, our economy deserves to see a bigger proportion of that tax revenue returned as investment into our economy.

“The ‘Northern Powerhouse’ and the ‘Midlands Engine’ seem to attract the most attention from the Government but it is Eastern enterprise which is driving the economy and creating the funds that are being invested in the North and the Midlands. This report shows that without significant investment in our own economy, we are in danger of seeing our exceptional growth stall.

“But this is not about simply asking for more money. My message to the Secretary of State was that we need your help to allow us to help ourselves. We need further devolution of powers to the Combined Authority to give us the tools we need to push our economy forward, something which was also highlighted in the CPIER report.

“That includes the powers to create mayoral development corporations, and to use mechanisms like tax increment financing through fiscal devolution which will help create investment funds to lever the private sector investment needed to build more houses, and deliver ground-breaking and transformational transport infrastructure like the Cambridgeshire Metro.”

The Devolution Deal with Government, secured in March 2017, included a target to increase economic output by nearly 100 per cent in the next 25 years, from £22 billion to over £40bn. 

The CPIER report highlights the actions needed to achieve this and to make the region a leading place in the world to live, learn and work.

The Combined Authority will work with local industry to agree this area’s main priorities for future action and investment on the back of the report to produce the Local Industrial Strategy. 

The strategy will be owned by the newly formed Business Board made up of industry leaders from across the county who met for the first time last month.

• PHOTOGRAPH: The official launch of the CPIER report, with from left, Chris Mann, BBC Radio Cambridgeshire; John Shropshire OBE, Chairman of G’s Fresh and CPIER Commissioner; Rt Hon Greg Clark, Secretary of State for Business, Energy and Industrial Strategy; Dame Kate Barker, CPIER Chair; Mark Dorsett, Caterpillar EAME Human Services and CPIER Commissioner; James Palmer, Cambridgeshire and Peterborough Combined Authority Mayor; Dr David Cleevely, CPIER Vice-Chair.

Cambridge has seen significant economic growth in recent years, but what has made the city so successful?

As we have seen in our recent mid-year Commercial Edge research report, economic growth for 2017 was just under 3.5 per cent which was twice the national average. Total output growth for 2018 is forecast at 1.9 per cent. However, several sectors in the city significantly outperformed this growth rate, including computing and information services, media, and professional services. 

Cambridge University’s Centre for Business Research has reported global turnover growth for Cambridge companies in 2017 as 14.4 per cent compared to the previous year’s figure of 10.8 per cent. 

Consumer expenditure has been rising at a much faster rate than the national average (an estimated 3.6 per cent pa in Cambridge compared to 2.2 per cent pa nationally). The city should continue to outperform the UK, although the differential is likely to reduce. 

The city’s retail sector has continued to trade well on the back of a relatively affluent catchment and strong tourist sector. However, it is not entirely insulated from the broader changes sweeping through the UK’s high streets, with an increase in vacant units in the city centre. 

Traffic congestion also remains a severe problem and increased investment in innovative public transport solutions will be required to deliver capacity for future growth. 

In the longer term, the city’s connectivity will be further enhanced through its position at the eastern end of the Oxford-Milton Keynes-Cambridge growth corridor. 

This will not only improve east-west transport links but also may help alleviate the city’s growing housing pressures, and also help to foster a knowledge cluster across a number of key economic centres.

The city’s strong economic fundamentals mean investor demand has remained strong this year. The UK funds are particularly active, along with the city’s colleges as well as overseas interest. 

Over £170 million has been transacted in the first half of the year, compared to a total of just under £100m over the whole of 2017. The largest deal of the year so far has been the sale of Cambridge Research Park for £78m by Rockspring to Royal London Asset Management reflecting a net initial yield of 4.9 per cent. The park comprises eight office properties and nine mid-tech units along with 13.5 acres of development land. 

In terms of retail, 59 St Andrews Street was purchased by Emmanuel College from M&G Real Estate for over £32m reflecting a NIY of 4.8 per cent. 

Investment market performance has been strong, with returns in the office sector approaching 30 per cent pa and industrial returns at more than 12 per cent pa (MSCI Quarterly Index, June 2018). Prime yields have been stable over the first half of the year, at 4.5 per cent for offices, 5.5 per cent for industrial and 3.8 per cent for retail.

As we can see, the Cambridge market is continuing to perform extremely well and, as evidence shows, this is mainly due to its strength in sectors such as technology, engineering and pharmaceuticals, underpinned by its unique Research & Development sector and the University of Cambridge. Long may it last! 

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Three Cambridge University PhDs who studied under five-star Dontrepreneur Steve Young – now full time with Apple – are scaling a transformational technology for conversational AI.

Co-founder Nikola Mrksic tells Business Weekly that the market PolyAI is focusing on is worth $1.3 trillion dollars – bigger than the world’s entire defence industry.

Headcount is scaling and thanks to funding by Amadeus Capital Partners in Cambridge, along with Passion, PolyAI has enough runway for the foreseeable future before having to put a figure on its killer round for global scale-up. Steve Young is advising the business and Dr Hermann Hauser of Amadeus Capital told me: “This is a prospect that I am really excited about.”

Mrksic said that the business had already received approaches from potential acquirers but says PolyAI has no intention of selling out. Mrksic was the first engineer at Cambridge speech technology startup VocalIQ which was bought by Apple for $100m.

He founded PolyAI with fellow Cambridge PhDs Shawn Wen and Eddy Su and they have been joined by an equally brilliant former PhD graduate, Matt Henderson.  

A source close to the business and an influencer in the field of conversational AI, revealed: “They have some very impressive technology for conversational AI. Firstly, they can train a generic query engine on large non-specific dialogue corpora and then map it onto a real application with very little application specific training data. 

“Secondly, they have some very smart software for efficiently collecting dialog model training data using crowd-sourcing. Thirdly they have a dataflow policy engine which allows traditional domain specific slot-based dialogue managers to be integrated with broad coverage Q&A style responses. 

“All of this allows them to build robust voice based application interfaces very quickly.”

Mrksic, who also worked at Apple for two years, said PolyAI had determined to cut through the hype surrounding Artificial Intelligence, focus on a game-changing technology and “pursue it relentlessly.”

PolyAI is already up to 15 staff from a standing start from 12 different countries and has set up a UK HQ in London while retaining its roots in Cambridge. Seven staff have been hired from Cambridge where Mrksic says the firm will remain “embedded.”

Mrksic says the team can build a world-beating AI business by using Cambridge, UK and EU talent and steal a march on any Silicon Valley rivals. “In the past few months we have worked on projects with major clients, including a leading phone company – not Apple – and we have a much different proposition to Apple’s Siri, for example. 

“We intend to use this tech platform to build a really big business with worldwide reach and totally disrupt the customer support market. Part of the vision would be to actually acquire call centres and drive the technology through the entire sector to huge public benefit.

“We have the capability to build the technology language by language – and scale across different languages. We had nothing like this at VocaliQ so we are thinking pretty big.”

PolyAI’s platform for conversational artificial intelligence is at the cutting edge of deep learning and natural language processing. Its models use language-independent neural networks to learn natural behaviour by imitating human conversation.

PolyAI supports virtual assistants including Alexa Skills, Google Actions, Facebook Messenger or Azure Bots. These platforms bring the middleware and PolyAI brings the voice app to life.
 
Whether it’s navigation, flight booking, shopping or playing music, the platform is sector-agnostic, continuously improving as it scales across different applications. 

The latest advances in deep learning also allow the models to scale across languages at almost no extra cost, making it easier to access new  markets.

Mrksic said: “Machine learning is the lifeblood of virtual assistants. Today, only tech giants have the AI arsenal to build good voice-based apps. With PolyAI, building great conversational apps is as simple as designing a website. Whether it’s navigation, flight booking, shopping or playing music, our backend models are the same.

“One assistant, many languages. Our models are polyglots – latest advances in deep learning allow them to scale across languages at almost no extra cost. New markets have never been closer.”

• PHOTOGRAPH: Steve Young of Apple (second left) pictured with his former PhD students who have co-founded PolyAI.

Serial entrepreneur and investor, Hermann Hauser, has called for the advent of more European growth funds dedicated to technology that are prepared to write mega cheques to scale innovative businesses.

Dr Hauser raised what were then record amounts for Cambridge at Acorn Computers in the late 70s and early 80s. He has watched the Science & Technology cluster in Cambridge mushroom over the last two decades but is now calling for more of the same.

Dr Hauser, whose quoted Acorn business spawned superchip world-leader Arm, was talking to Business Weekly after major rounds for cyber security specialist Darktrace and medical innovator Owlstone in the last few days.

He said: “This is absolutely brilliant. We need a lot more of these deals in Europe and it is great to see the beginning of it in Cambridge.

“The lack of $50m to $100m rounds in Europe is the main drawback of the hi-tech scene. We need more European tech growth funds which can write $50m to $100m cheques to keep the momentum going.”

Dr Hauser co-founded Amadeus Capital Partners in 1997 with Anne Glover. His successes at Amadeus include CSR plc; Entropic Research Laboratory, acquired by Microsoft in 1999; Solexa, acquired by Illumina in 2007 and Icera, acquired by Nvidia in 2011.

He has founded or co-founded companies in a wide range of technology sectors including Acorn Computers, Active Book Company, Virata, Net Products, NetChannel and Cambridge Network. He was a founder director of IQ (Bio), IXI Limited, Vocalis, SynGenix, Advanced Displays Limited (acquired by Cambridge Display Technology), Electronic Share Information Limited, E*Trade UK and has supported many other start-ups.

In September 2018, Amadeus Capital Partners lead a $5m funding round in London-based SLAMcore which is developing spatial artificial intelligence (AI) algorithms for robots and drones. 

Also last month, one of Amadeus’ portfolio companies – machine learning innovator Ravelin – raised £8m to help secure online commerce from the growing threat of fraud.

Genetic engineer Sir Greg Winter has won the 2018 Nobel Prize in Chemistry to maintain a record-breaking run for affiliates of Cambridge University.

Six months after being honoured by Business Weekly and Cambridge Enterprise with our inaugural  Lifetime Achievement Award, Sir Greg has become the 107th affiliate of Cambridge to be awarded a Nobel Prize.

Affiliates of the University of Cambridge have received more Nobel Prizes than those of any other institution.

Sir Greg has been jointly awarded the prize along with Frances Arnold and George Smith for his pioneering work in using phage display for the directed evolution of antibodies, with the aim of producing new pharmaceuticals.

The first pharmaceutical based on this method, adalimumab, was approved in 2002 and is used for rheumatoid arthritis, psoriasis and inflammatory bowel diseases. Since then, phage display has produced antibodies that can neutralise toxins, counteract autoimmune diseases and cure metastatic cancer.

The Nobel Assembly said: “The 2018 Nobel Laureates in Chemistry have taken control of evolution and used it for purposes that bring the greatest benefit to humankind. 

“Enzymes produced through directed evolution are used to manufacture everything from biofuels to pharmaceuticals. Antibodies evolved using a method called phage display can combat autoimmune diseases and in some cases cure metastatic cancer.”

Professor Winter, the Master of Trinity College, is best known for his research and inventions relating to humanised and human therapeutic antibodies. Sir Gregory is a graduate of Trinity College and was a senior research fellow before becoming Master.

His research career has been based almost entirely in Cambridge at the Medical Research Council’s Laboratory of Molecular Biology and the Centre for Protein Engineering.

During this time he also founded three Cambridge biotechnology companies based on his inventions: Cambridge Antibody Technology (acquired by AstraZeneca), Domantis (acquired by GlaxoSmithKline) and Bicycle Therapeutics.

Sir Greg studied Natural Sciences at Trinity College and was awarded his PhD, also from Cambridge, in 1977.

Professor Patrick Maxwell, Regius Professor of Physic and head of the School of Clinical Medicine at the University of Cambridge, said: “I am absolutely delighted that Sir Greg’s work has been recognised with a Nobel Prize. 

“The work for which the prize is awarded was carried out on the Cambridge Biomedical Campus. It directly led to the power of monoclonal antibodies being harnessed for treatment of disease. 

“Medicines based on Sir Greg’s discovery have transformed the lives of patients around the world. His inventions really have produced silver bullets that have transformed the way medicine is practised.”

Professor Sir Alan Fersht, former Master of Gonville and Caius, added: “Greg Winter is an outstandingly creative scientist of a practical bent. He has applied his skills and imagination to the benefit of humankind to create, amongst other inventions, novel engineered antibodies that have formed the basis of a new pharmaceutical industry to treat disease and cancer. It is a thoroughly worthy Nobel Prize.”

Nobel Prizes have been awarded to members of the University of Cambridge for significant advances as diverse as the discovery of the structure of DNA, the development of a national income accounting system, the mastery of an epic and narrative psychological art and the discovery of penicillin.

To date 107 affiliates of the University of Cambridge have been awarded the Nobel Prize since 1904 – spanning every category: 32 in Physics, 26 in Medicine, 25 in Chemistry, 11 in Economics, three in Literature and two in Peace. Trinity College has 33 Nobel Laureates, the most of any Cambridge college.

In 1950, Bertrand Russell became the first person from Cambridge to receive the Nobel Prize in Literature, for his 1946 work A History of Western Philosophy.

Frederick Sanger, from St John’s and Fellow of King’s, is one of only four individuals to have been awarded a Nobel Prize twice – he received the Nobel Prize in Chemistry in 1958 and 1980.

As UK companies grow and start to operate internationally, commercial opportunities may require international expansion so that the company is no longer trading with a country, but rather is actually trading within a country, writes Tim Shaw – associate partner at Ensors Chartered Accountants. 

Once this stage is reached, it is likely that the company has fallen into the scope of overseas corporate taxes and a decision normally needs to be made as to whether to regularise this by forming a local branch of the UK company or by incorporating a local subsidiary.

In deciding which is the most appropriate route, local legal and fiscal advice should be sought but there are likely to be certain common factors which should be borne in mind.

As an example, a subsidiary is a separate legal person and so ring fences liability, whereas a branch may have less onerous local accounts and tax filing requirements.

It is possible however that commercial considerations may drive the decision; for instance a subsidiary may be perceived as showing more commitment to a marketplace by both local customers and employees.

Irrespective of the structure adopted, it is likely that there will be a consequent need to register with the local fiscal authority for corporate taxes, value added taxes and payroll withholdings.

This should not be overlooked as penalties could be charged for late registrations and may impact adversely upon the relationship with the local fiscal authority going forward. 
Once the overseas business is up and running, the following taxation issues may arise.

Transfer pricing

Where transactions are undertaken between the UK company and the overseas entity, it will be necessary to comply with both the transfer pricing legislation of the UK and of the overseas territory.

If the overseas territory follows the OECD’s approach to transfer pricing, it is likely that transactions will need to be undertaken at open market value (‘arms length’) to meet the local and UK requirements.
Dependent on the level of profits involved, it is possible that the local fiscal authority may have a different opinion to HMRC on what is an arm’s length price!

Repatriation of profits

Hopefully, the overseas operation will be profitable. It will therefore be necessary to consider how profits, or surplus funds, may be repatriated to the UK in a tax efficient manner. 

For a branch, this can be relatively straightforward as it can simply repatriate surplus cash to the company of which it forms part. A subsidiary can achieve the same by lending surplus funds to a UK parent, but this can have unfortunate taxation consequences dependent upon the territory at issue.

Conventional ways for an overseas subsidiary to repatriate funds to a UK parent are dividends (from post corporate tax distributable profits but unlikely to be subject to UK corporation tax on receipt), interest on loans extended to finance the subsidiary or royalties charged for the local use of intellectual property owned by the parent. 

Withholding taxes may be applied locally on such payments to the UK. These may be reduced by applicable double taxation treaties or potentially mitigated completely by EU law if the subsidiary is resident in an EU member state – this later relief may well disappear of course following Brexit. 

Dependent upon the UK parent’s corporation tax position, UK tax relief may be available in part or in full for such withholding taxes.

Alternatively, parent companies may choose to repatriate profits by charges made to the overseas subsidiary for services provided such as strategic management or group back office functions.

Any such charges will need to be carefully considered to ensure that they are tax deductible in the subsidiary and comply with appropriate transfer pricing rules.

Secondment of staff

It is quite usual for staff to be seconded from a UK parent to assist in setting up and developing the subsidiary’s operations. It is important to ensure that local income tax requirements are met and that, to the extent possible, double taxation does not arise to such employees who also remain taxable in the UK.

Expatriate tax issues can be extremely complicated with often minimal guidance under tax legislation and it is essential that professional advice is taken in advance of secondment arrangements being put in place so that any available tax reliefs may be obtained and tax costs minimised.

Other issues

Where a UK company imports goods into the EU and supplies these onward to an EU resident subsidiary, it is possible, dependent on the manner in which Brexit is undertaken, that a double charge to customs duties may arise post Brexit – on the import of goods into the UK and on the subsequent import into the (then) EU.

Despite the current lack of clarity, this should be considered when looking to put in place commercial operating structures pre Brexit.

Whilst it is increasingly common for UK employees, particularly in the tech sector, to receive part of their remuneration in share options, it should not be assumed that, for employees of the local subsidiary, share options will be tax effective or even desired.

Setting up an overseas operation is often a natural progression and an indication of growth. Professional advice, both UK and local, should always be sought before doing so to ensure that the expansion is structured in a tax efficient manner and meets the commercial and operational aims of the company.

For more information on setting up an overseas operation, call Tim on 01223 428314 or email: tim.shaw [at] ensors.co.uk

Cambridge UK cybersecurity technology business Darktrace has cashed in on its world leadership position to raise an extra $50 million to hoist its valuation to $1.65 billion.

The Series E success marks a phenomenal spurt of growth for Darktrace which is zooming towards $2bn valuation just 18 months after being named Business Weekly’s Business of the Year.

CEO Nicole Eagan said the cash would be used to fund further global growth. Darktrace has just expanded its R & D nervecentre in Cambridge. It has seen a massive upsurge in cyber defence work for international airports.

The company has grown its employee headcount by 60 per cent in the last 12 months, with global headcount now topping 750.

To keep pace with soaring global demand for its technology – honed within Cambridge University – Darktrace has accelerated its global operations, opening eight new offices in the last year including locations in Los Angeles, Mexico City and São Paulo, as well as tripling the size of its Asian headquarters in Singapore on top of the Cambridge hothouse expansion.

Nicole Eagan said: “Darktrace continues to enjoy strong growth in new and existing geographies, and is now the most widely used Enterprise AI on the market. 

“The increase in our valuation in just a few months is testament to the fundamental power of our Enterprise Immune System. As we begin to see real-world attacks leveraging offensive AI, Darktrace will be indispensable in keeping defenders one step ahead.”

The Series E investment has been led by Vitruvian Partners with participation from existing investors KKR and 1011 Ventures.

Since its last funding, Darktrace has more than doubled its number of deployments and is now finding threats that other tools miss in over 7,000 networks. It became Cambridge’s 16th billion dollar business at the end of May.

The company’s rapidly growing roster of customers includes eight major international airports including London Gatwick Airport and Milan-Bergamo Orio Al Serio International Airport, the world-leading Science Museum Group, as well as a number of global financial institutions such as AIG, AEGON Sony Life Insurance and Ipreo.

Sophie Bower-Straziota, managing director at Vitruvian, said: “Darktrace has built a unique combination of world-class AI capabilities, deep cyber domain expertise, and a highly effective business model. This has rapidly created scale and a leading edge over all competitors.

“Most excitingly, the sophistication and quality of Darktrace’s AI is evidenced by the rapid success of its autonomous response system, Antigena, the first of its kind in the market.”

Cambridge technology gamechanger Arm has unveiled a superchip that it believes will revolutionise the safety of autonomous vehicles around the globe.

It has delivered what it brands ‘a bumper to bumper’ solution designed to accelerate mass-market autonomous driving. The technology promises to literally deliver a new generation of self-driven vehicles on a super-slick silicon highway.

Arm chips are already the power behind the throne of design and performance for the world’s leading manufacturers in the automotive industry.The UK business has been designing chips for automotive applications since 1996 and claimed today: “Only Arm can address the compute needs of the entire vehicle from bumper to bumper. 

“It’s why the top 15 automotive chip makers are Arm licensees, and why Arm-based silicon powers more than 65 per cent of today’s ADAS applications as well as 85 percent of IVI applications. 

“By delivering safe, autonomous-class compute solutions to the industry, Arm and its ecosystem are ensuring safety is not an afterthought and helping car makers earn the consumer trust required for the mass deployment of safe and fully-autonomous vehicles.”

Arm says it is “leading the charge for safety to accelerate mass-market autonomous driving” with its ahead-of-the-curve technology: Optimised for 7nm, its Cortex-A76AE is the world’s first autonomous-class processor with integrated safety, high-performance, leading-efficiency and security IP options.

Lakshmi Mandyam, vice-president of automotive, Embedded and Automotive Line of Business at Arm said: “In my role as Arm’s automotive lead, my team and I are constantly talking with both carmakers and our automotive ecosystem discussing progress toward fully-autonomous driving.

“Safety is the highest priority for carmakers we talk with, for both the obvious technology factors associated with autonomous systems controlling all aspects of driving, but also to ensure that human passengers can trust their automated driver.

“If consumers don’t trust the autonomous systems in their cars are safe, then mass market acceptance of this technology will be slow to happen.

“Ironically, it’s a human factor, driver error, autonomous driving is expected to eliminate. Considering 94 per cent of all accidents are a result of driver error, fully-autonomous driving is expected to significantly reduce the number of accidents and fatalities.

“It is why safety cannot be an afterthought and take a back seat to performance, power-efficiency and security when developing autonomous-class SoCs and systems. 

“Unfortunately, the path to level 5 autonomy has been paved with prototypes, often based on power-hungry, expensive data centre CPUs lacking even the most basic functional safety features.

“Arm has prioritised safety for years now and it is a key reason why Arm IP is in 65 per cent of the silicon used in ADAS applications. Our automotive ecosystem has access to the industry’s broadest array of functional safety IP with the latest ISO certifications. 

“To further ensure our silicon partners get a head start on safety, today we’re announcing the Arm Safety Ready program which centralises Arm’s massive investment in safety, enabling our silicon partners and the entire automotive supply chain to accelerate their timelines for bringing safer products to market faster.

“Our safety leadership doesn’t stop with integrating the latest certifications and standards. We’re also announcing availability of the first autonomous-class processor with integrated safety, the new Arm Cortex-A76AE, which has been uniquely designed for automotive and includes Split-Lock technology, a game-changing safety innovation available for the first time in application processors.

“The Safety Ready programme encompasses Arm’s existing safe and new or future products which have been through a rigorous functional safety process, including systematic flows and development in support of ISO 26262 and IEC 61508 standards.

“Safety Ready is a one-stop shop for software, tools, components, certifications and standards which will simplify and reduce the cost of integrating functional safety for Arm partners.

“By taking advantage of the program offerings, partners and car makers can be confident their SoCs and systems incorporate the highest levels of functional safety required for autonomous applications.”

Mandyam described the Cortex-A76AE as “a game-changing new CPU uniquely designed for automotive and optimised for 7nm process nodes. AE stands for Automotive Enhanced” and any Arm IP with the AE designator will include specific features addressing the requirements of in-vehicle processing.”

A high level of processing capability is required for autonomous driving, with inherent safety as standard. Cortex-A76AE delivers both without compromise as the industry’s first high-performance application processor with Split-Lock capability, combining the processing performance required for autonomous applications and high-integrity safety. 

While Split-Lock is not new to the industry, Arm is the first to introduce it to a processor uniquely designed for high performance automotive applications such as autonomous drive.

Inherent in the Arm tech breakthrough is lower power usage. Car makers can design their autonomous systems to require watts and not the kilowatts required for today prototypes thanks to Arm’s leadership in power-efficient computing in Cortex-A76AE.

Lower-power also enables a more energy-efficient use of vehicle battery power combined with thermal efficiency to aid the packaging of compute capability while extending the range of vehicles for a lower total cost of driving.

Arm’s Intellectual Property Group president, Rene Haas, moved into the new role at Arm two years ago, running the core IP business. This coincided with the purchase of Arm by SoftBank which gave Arm what Haas called “the unique opportunity to accelerate our investments in developing IP for new growth markets. A bit of a personal perfect storm!”

Haas says: “This was not only a great opportunity for Arm but also our entire ecosystem. However, one challenge we had at Arm was that we were more product focused vs customer/market focused and were not best suited to address the opportunity in front of us.

“We needed to shift directions and begin designing IP specifically markets such as servers, networking and automotive. Several months later we addressed this challenge by completing a major structural change and merged several IP product groups into new lines of business; infrastructure, IoT devices, client, machine learning and automotive/embedded computing.

“This now allows us to develop IP products uniquely designed based on market requirements, ensuring that we meet customers product and schedule requirements.

“The new businesses combined with SoftBank empowering us to accelerate our investments in them has made for an already busy 2018. Earlier this year, we announced our first ML platform, Project Trillium, followed by Cortex-A76, specifically designed to address the performance requirements of laptops and performance-efficiency demands of next-generation smartphones. And a few months later we shared our first client roadmap with products expected to deliver annual gains of 15-20 percent IPC performance. And today, our automotive line of business announces the world’s first autonomous-class processor with integrated functional safety, the Cortex-A76AE (AE stands for Automotive Enhanced.) 

“Cortex-A76AE and our future AE processors are a direct result of our constant discussions with carmakers who of course want higher performance and efficiency but want to see chip makers prioritise innovating for safety and ensuring their processors include the latest functional safety standards and certifications. 

“Carmakers are tired of seeing safety treated as an afterthought and taking a backseat (no pun intended) to performance. As Lakshmi Mandyam says, if consumers don’t trust the autonomous systems in their cars are safe, then mass market acceptance of this technology will be slow to happen.

“Arm’s AE processors will be the most safety-critical products we can and will design. AE processors will go through a rigorous functional safety process and include safety innovations like dual-core lock-step to ensure redundancy in our CPU cores. 

“In fact, we’ve integrated functional safety into other system IP including the IP connecting multiple CPU clusters and memory management. And as Arm develops more purpose-built automotive compute IP such as ML processors and GPUs, you can be certain the same safety-first principle will guide those designs.

“No one else in the industry can match our track record of delivering products with the latest functional safety standards across the entire vehicle.

“In fact, Arm is unmatched when it comes to enabling compute in vehicles. The presence of Arm IP is truly bumper-to-bumper with 65 per cent of today’s automated driver assistance (ADAS) applications running on Arm IP as well as 85 percent of in-vehicle information systems.

“When looking at the future of automotive, it’s the one experience I can point to that truly represents the next transformative convergence point of advanced technologies – ML/AI, the smartphone/mobile experience, IoT and in a couple of years, 5G connectivity.

“I look at the car as ultimately being the world’s most sophisticated IoT endpoint – with integrated functional safety of course. And even though car makers want to see more compute on board the vehicle and less in the cloud, 5G connectivity will be a vital part in keeping cars safe.

“A faster, higher-bandwidth and lower-latency 5G network built for billions of connected devices will keep vehicles connected to communicate road and vehicle system data quickly back to the cloud, while quickly alerting other vehicles to potential hazards another vehicle’s data may provide.”

Cambridge has the weaponry to compete for new companies and talent with the world’s best technology centres in the years ahead thanks to multi-billion dollar investment in its burgeoning AI and cyber security sectors, new research from Savills reveals.

Lower wages in the UK is likely to draw more talent from the US and other hi-tech honeypots and there is already a growing global queue for suitable offices in the city to house new international technology plays, says Rob Sadler of Savills.

Unveiling Savills’ new spotlight report, ‘Cambridge: A city state of mind?’Sadler spelled out the unprecedented opportunity for Cambridge to beat centres like its namesake in Massachusetts to become undisputed world AI and cybertech Number One.

Savills has called for more speculative office development and more affordable housing to help Cambridge confirm its world lead – including the introduction of a 40 per cent deposit ‘Help to Buy’ residential product in Cambridge like there is in London.

Sadler believes it would be criminal for Cambridge to let its advantage slip. He says: “Cambridge has been one of the key global success stories over the past decade, but it needs to evolve and adopt new strategies to remain in a position of strength in a post-Brexit world.

“Savills research shows that Cambridge has attracted more than £8.25 billion of corporate investment (VC, M&A and private equity) in 2017, compared to the five-year annual average of £7.87 billion, as the city continues to attract multinational office and lab occupiers and competes as a key global innovation hub.

“An obvious growth area for the Cambridge economy is an increase in technology businesses, in particular Artificial Intelligence and cyber security. Data analysed by Savills shows that total corporate investment for the cyber security sector in the city for the three-year period of 2015 to 2017 saw growth of more than 3,000 per cent compared to the preceding three years (2012-2014). The comparable figure for AI is almost 2,500 per cent. In contrast, although still an impressive figure, the more traditional life sciences sector has seen just 670 per cent growth in this time.”

To put this into a real estate context, Savills’ figures show that in the first half of 2018 technology businesses transacted 103,636 sq ft of space, accounting for 55 per cent of all take-up in the city.

For instance, Samsung has recently committed to opening a new AI hub in Cambridge, which will add to the already growing cluster of mature AI developers, such as Amazon, Microsoft, and a fired-up phalanx of startup firms.
Darktrace is another example, having raised $180 million of funding since its inception in 2013 from global investors including KKR and SoftBank. The cyber security firm is in the process of moving into new office space totalling 19,813 sq ft at the Maurice Wilkes Building on St John’s Innovation Park, an increase in floor space of circa 692 per cent in the past five years.

Similarly, PROWLER.io – a growing force in AI, is moving from 4,500 sq ft to 26,000 sq ft at 72 Hills Road after just two years of remarkable growth.

Sadler deals another ace into Cambridge’s hand: “The University of Cambridge is due to play a large role in the growth of the AI sector having received £10 million in funding to develop a new supercomputer which will enhance the research capabilities of these companies.

“With a limited supply of AI experts across the UK, this is likely to create and attract new talent to the city. What’s more, the UK Government’s AI Deal is worth more than £1 billion and Cambridge is well placed to capitalise on increasing interest in the sector.”

Savills notes that the future of Cambridge rests on its ability to continue to establish these growth sectors and new workspace is appearing to assist with this ongoing evolution. The startup community in Cambridge remains buoyant but at present demand outweighs supply. The Bradfield Centre at Cambridge Science Park is a new 40,000 sq ft facility dedicated to housing startups but this and St John’s Innovation Centre are the only large co-working schemes currently available.

Savills is aware of more than 100,000 sq ft of requirements from serviced office operators looking for space in Cambridge which, if realised, could help further advance technology innovation in the city.

With a growing international reputation for AI capability and strong connections to sources of capital, Cambridge is likely to compete at the highest global level within the bioscience and technology fields, especially with places such as Cambridge, Massachusetts  in the US, says Sadler.

“Brexit uncertainties and a weaker sterling rate compared to the dollar means that salaries are by far the biggest cost and differentiating financial factor in locating a corporate business, with UK wages currently at a significant discount to the US in this sector,” he adds.

“We are very well placed to take advantage of the discounts created by Brexit and attract and retain global firms. What we now need to do is make sure we can meet their requirements by providing appropriate office space, robust infrastructure and affordable housing for staff coming to work in these new emerging sectors within Cambridge.”

From a residential property perspective, Cambridge is a city facing the same challenges as London – and increasingly patterns seen in London are played out in Cambridge. Like the capital, affordability remains challenging and developments outside the city, in necklace villages, have seen an increase in demand as a result.

Cambridge also mirrors the London market’s response to political uncertainty, stamp duty hikes and the targeting of buy-to-let mortgages. Political uncertainty is likely to be the overriding factor in the market for the next six months and, although we anticipate buyer uncertainty over Brexit will inevitably lead to inactivity, there will be room for growth in the longer term.

As in London, affordability in Cambridge remains a challenge. Pressure on the city means hinterland locations are seeing increasing demand.

Within the city, our latest report shows the median house prices to be 13.5 times greater than median annual earnings. By comparison in the neighbouring local authorities of South Cambridgeshire, Huntingdonshire and East Cambridgeshire house prices are 11.0, 8.7 and 9.8 times earnings respectively – and although still a concern for many would be buyers, these locations are not as stretched as those seeking to buy in Cambridge itself, so those looking for value will look to these areas.

The city has a strong residential development pipeline and in our report Savills has identified sites with capacity for over 17,000 homes either in planning or currently under construction in the city. However, much of the new development currently available is aimed at the top end of the market, the average value in the year to June 2018 for a new build house was £814,865, 33 per cent higher than the average for second-hand houses. This difference, combined with limited supply, is helping to hold up values in the second-hand sector. In contrast, in South Cambridgeshire, new build values were 1.8 per cent below second-hand values and will look attractive by comparison.

Uncertainty is likely to be the driving force in the Cambridge residential market for the next couple of years as the UK negotiates its exit from the European Union. But where international buyers may have slowed, the international rental market is still healthy.  Cambridge is still attracting an international work force, who are increasingly looking to the rental market.

According to Savills’ deal book data in 2016 and 2017, 29 per cent of new lettings were to European tenants. Once the future of the UK’s relationship becomes clearer, and after the recent correction in prices, there will be room for future growth.

Toby Greenhow, director, Cambridge residential development sales, says: “The average house price to earnings ratio in Cambridge is similar to that of Greater London and therefore constraining for many. “If we had a 40 per cent deposit ‘Help to Buy’ product in Cambridge, as there is in London, this would help many more buyers fulfil their dreams of home ownership.”

Overall, Savills believes that Cambridge will keep growing and widening its reach. The fundamentals of a buoyant commercial market coupled with a return to growth in the residential market, once the uncertainty of Brexit is resolved, means that the city will continue to be viewed as competitive in a global market, Sadler says.

Cambridge University scientists are set to trial a new vaccine designed to counter killer diseases such as Ebola, Marburg and Lassa Fever.

Following successful animal trials, the Cambridge team has been awarded £2 million by Innovate UK and the Department of Health and Social Care to take the vaccine to clinical trials in humans.

The new vaccine builds on almost two decades of research to protect against diseases caused by RNA viruses. 

The Cambridge team will simultaneously start studying the natural animal reservoirs of the viruses in an attempt to try and predict which strains are likely to cause future outbreaks – information that will be essential for creating effective vaccines.

Ebola, Lassa and Marburg viruses cause haemorrhagic fever, leading to severe disease, often with high mortality rates. 

Outbreaks can cause devastating local epidemics in the human population and to wildlife, including non-human primates. 

The recent Ebola epidemic in West Africa (2013–2016) killed over 11,000 people and devastated the infrastructure and economies of Liberia, Sierra Leone and Guinea.

Professor Jonathan Heeney and colleagues at the Lab of Viral Zoonotics, University of Cambridge, have developed and successfully tested a trivalent vaccine in guinea pigs that protects against Ebola, Lassa and Marburg viruses. 

The research takes a new approach pioneered by Professor Heeney and builds on Cambridge’s strengths in genomics, monoclonal antibody research and computational biology. It has led to the formation of DIOSynVax, a spin-out company of Cambridge Enterprise, the university’s commercialisation arm. 

A virus’s genetic code is written into its RNA (just as ours is written into our DNA), which leads to the generation of proteins. When we are infected by a virus, our immune system responds to these proteins, known as ‘antigens’, producing antibodies that can identify and try to eliminate the invading pathogen.

The approach developed by Professor Heeney involves understanding how the immune system correctly identifies the virus from its proteins, and using this information to create ‘viruses’ that can generate an immune response. Using monoclonal antibodies – copies of antibodies taken from survivors of the target diseases – they can then test whether the body can effectively eliminate these fake viruses, leading to protection.

“We’ve taken fundamental science that stretches back almost two decades and developed a new approach to vaccine development,” says Professor Heeney. 

“This has the potential to dramatically reduce the time needed to produce new vaccines and change the way in which the industry makes them.”

With the new funding, the team hopes to scale up production while ensuring that the quality of the vaccine is maintained. They will then carry out toxicity tests in animals and human blood samples to test for potential adverse effects; if successful, they will then trial the vaccine in healthy human volunteers.

The funding is part of a £5m commitment from the Department of Health and Social Care to fund five projects to develop new vaccines with a ‘One Health’ focus, considering how the environment, the health of animals and the health of humans interact. 

This sits within the Government’s £120m UK aid commitment to develop vaccines to help tackle diseases with epidemic potential.

In recent Ebola outbreaks, the approach used successfully by the World Health Organisation is known as ‘ring vaccination’, focused on vaccinating and monitoring a ring of people around each infected individual. 

However, this approach can only be used in response to an outbreak. In order for a vaccine to be used proactively – to prevent an outbreak in the first place – it is necessary to predict which strain or strains of a virus are most likely to cause future epidemics.

“A disproportionally high number of emerging and re-emerging diseases – from Ebola and Lassa through to rabies and influenza – are caused by RNA viruses carried naturally by animals,” says Professor Heeney. 

“We know very little about the viral diversity within these reservoir species and what enables them to spread to humans – and hence where the likely future threats lie.”

Viral genomes are notoriously variable due to the high mutation rates that occur during replication. These accumulate over time and result in evolution of the viruses as they circulate in their natural animal reservoir populations. If some viral variants arise and are able to adapt to use human cell receptors and are then able to escape immune defences, they may become highly infectious and cause large disease outbreaks.

“Vaccines are only as good as the antigen immune targets of the virus that they are designed for,” adds Professor Heeney. 

“If the antigen changes, the vaccine will no longer be effective. In most cases, current vaccine candidates against RNA viruses are from past human outbreaks with little or no information of future risks from viral variants carried in animal reservoirs, especially those with the potential for animal-to-human transmission.”

Professor Heeney has also received £1.4 million from the Biotechnology and Biological Sciences Research Council (BBSRC) to lead a project that aims to predict where future outbreaks may arise from and the likely strains, and to then use this knowledge to inform vaccine design. 

This One Health project enlists veterinarians, clinicians, ecologists and medical and public health workers in West Africa to understand how people catch Lassa fever from rat populations. 

Their work will include trapping rat species that carry these viruses and placing GPS tags to monitor their movements, as well as obtaining molecular, genomic and antibody data from the animals and viral sequences from infected rats.

Professor Melanie Welham, executive chair of BBSRC, says: “This important research from the team at the University of Cambridge is about providing effective treatments for some potentially deadly diseases spread by rats and bats: Lassa and Ebola respectively. 

“Novel strategies to combat dangerous infections like these are essential and often underpin the development of much-needed next generation vaccines. Professor Heeney and team have already made a significant difference in this area, researching cross species transmissions of these viruses, with a view to developing vaccines for Ebola and Lassa that would be effective against multiple strains.”

The team is also collaborating with Professor James Wood, head of the Department of Veterinary Medicine at Cambridge, who is conducting a complementary study funded by the Global Challenges Research Fund to sample bat colonies in Ghana, believed to be a natural reservoir for the Ebola virus.

“Equipped with this information, we should be able to design better vaccine antigens for more effective and broadly-protective vaccines,” says Professor Heeney. 

“Combined with our accelerated vaccine development platform, this has the potential to have an enormous positive impact on global public health.”